Barclays
Annual Report 2023

Plain-text annual report

Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Welcome to Barclays Creating positive outcomes for our stakeholders Barclays PLC Annual Report 2023 01 Our Purpose Our Vision Working together for a better financial future The UK-centred leader in global finance A comprehensive and pre-eminent UK consumer, corporate, wealth and private banking franchise The leading non-US based investment bank A strong, specialist US consumer bank Our Values Respect Integrity Service Excellence Stewardship We harness the power of diversity and inclusion in our business, trust those we work with, and value everyone’s contribution We operate with honesty, courage, transparency and fairness in all we do We act with empathy and humility, putting the people and businesses we serve at the centre of what we do We set high standards for what we do, championing innovation and using our energy, expertise and resources to make a positive difference We prize sustainability, and are passionate about leaving things better than we found them Customers and clients Colleagues Society Investors Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements The Group at a glance Working together for a better financial future Barclays PLC Annual Report 2023 02 Barclays supports individuals and small businesses through our consumer banking services, and larger businesses and institutions through our corporate and investment banking services. Barclays is diversified by business, geography and income type. Financial headlines 1 £6.6bn Profit before tax (PBT) 1 32.4p Earnings per share 1 10.6% Return on tangible equity (EPS) (RoTE) Customers and clients Colleagues 7.3m personal customers who Barclays helped to open a new savings account or grow their deposits with us (2023) of colleagues would recommend Barclays as a great place to work (2023) 86% Society Investors 3.27m people upskilled by Barclays (2023) 37%increase in announced 2023 capital distribution versus 2022 Note: 1 Excluding the impact of Q423 structural cost actions. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements In this year’s report Barclays PLC Annual Report 2023 03 Parts 1, 2 and 3 of Barclays PLC 2023 Annual Report together comprise Barclays PLC’s annual accounts and report for the purposes of Section 423 of the Companies Act 2006. Please note that throughout the document, graphical representation of component parts may not sum due to rounding. Strategic report The Barclays PLC Strategic report 2023 was approved by the Board of Directors on 19 February 2024 and signed on its behalf by the Chairman. The Strategic report 2023 is not the Group’s statutory accounts. It does not contain the full text of the Directors’ report, and it does not contain sufficient information to allow as full an understanding of the results and state of affairs of the Group and of its policies and arrangements concerning Directors’ remuneration as would be provided by the full Annual Report 2023. Inside Part 1 Strategic report Welcome to Barclays The Group at a glance In this year's report Chairman’s introduction Chief Executive’s review Our business model Our strategy Our business environment Our plan and targets Our new divisional structure 2023 divisional review About Barclays Barclays UK Barclays International: Corporate and Investment Bank Barclays International: Consumer, Cards and Payments 21 11Our strategy Our stakeholders Customers and clients Colleagues Society Investors Additional disclosure Section 172(1) statement Non-financial and sustainability information statement Task Force on Climate-related financial disclosure statement of compliance ESG Ratings and Benchmarks 1 2 3 4 7 10 11 12 13 14 15 ESG-related reporting and disclosures 16 17 19 Managing risk Viability statement Shareholder information Important information 15 2023 divisional review 23 24 27 30 34 37 38 40 48 49 50 51 54 56 58 Inside Part 2 Climate and sustainability report Risks and opportunities Implementing our climate strategy Resilience of our strategy Inside Part 3 59 Governance 66 72 Directors’ report Board governance Remuneration report 130 Other governance Risk review 23Our stakeholders Risk review contents Risk management Material existing and emerging risks Principal risk management Risk performance Supervision and regulation Financial review Key performance indicators Consolidated summary income statement Income statement commentary Consolidated summary balance sheet Balance sheet commentary Analysis of results by business Non-IFRS performance measures Financial statements Financial statements contents Consolidated financial statements 140 144 145 191 230 254 255 256 258 272 284 363 373 374 376 378 380 387 394 395 413 Notes to the financial statements 421 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Chairman’s introduction Barclays PLC Annual Report 2023 04 Working together for a better financial future Our strong and stable franchise has enabled us to remain resilient and continue to support our customers, clients and communities through an unpredictable external environment. We will continue to work together for a better financial future for all our stakeholders. “The UK has been Barclays' home for over 300 years and as such we play an active part in its economic success.” Nigel Higgins Chairman Banks and the banking system should at all times strive for a high degree of stability and reliability, reflecting their resilience, continuity of service to customers and clients, and the essential mechanics they perform for national and global economies. The premium for stability and reliability, and the challenge of achieving both, rise in difficult times. The essence of our message to you this year is that Barclays is well on the journey to a more sustainable, and satisfactory performance, but has more to do and a plan to do it. That the global background is unpredictable is obvious and volatility is now the backdrop to our world, where we seek so many things with only partial success – continuing economic growth, predictable courses for inflation and interest rates, settled patterns of global trade, stability within and between nations. 2023 started with fairly uniform and downbeat economic and equity market expectations. On both counts, however, the intervening twelve months surprised on the positive side, but not without considerable stress being experienced by households and businesses, triggered by inflation and rising interest rates. It is testimony to the resilience of the economic system that this occurred but is sobering to note how wrong so much of the predictive commentary could be. As a global bank we must pay close heed to shifts in the external environment and reverberations for our stakeholders. Banks vary enormously, by geography and by individual firm, in terms of how they respond to changes in interest rates and the interest rate curve. After years of negligible interest rates, banks have to find the right balance between higher rates for borrowers, which improve profitability, and sometimes conflicting consumer and political expectations; this is not an easy balance to strike. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Chairman’s introduction (continued) Facts and figures 1 32.4p Earnings per share 2022:30.8p 8.0pDividend 2022: 7.25p £3.0bn Total capital return in relation to 2023 2022: £2.1bn $67.8bn Sustainable and transition financing facilitated towards the target of $1trn by 2030 In this environment, Barclays has maintained strong liquidity and operated towards the top of its target range for capital throughout 2023. With a profitable business model we delivered a 1 , Return on Tangible Equity for 2023 of 10.6% enabling capital distributions of c. £3.0bn. These capital returns mean that since 2019 we have returned c.£9bn in dividends and buybacks to our shareholders, representing a share count reduction of 13%. Our management team has brought stability to earnings, delivering consistent underlying returns above 10% since 2021, whilst continuing to oversee significant improvements in the operations of the bank as part of our ambition to achieve a standard of being consistently excellent in all that Barclays does. This has been a very material endeavour and Venkat gives more detail about our renewed operational rigour in his letter. However, both the Board and management team are acutely aware that our returns should be higher, and our valuation is far from where it should be. Our focus since the global financial crisis has been to rebuild and stabilise the bank. In a world of constrained capital and human resource, the bank has prioritised its operational and financial resilience, including significant investments in the technology stack. This has included a considerable shrinkage of geographic footprint and a focus on those businesses where we believe we can be successful. We have also reinforced the talent and infrastructure of the Investment Bank, in Markets and Banking in particular, given that these are scale-dependent businesses and are central to the diversified returns strategy we pursue. The consumer businesses of Barclays have received less consistent and focused investment. The challenges of performance and valuation are linked but distinct. In addressing the challenges and regulatory requirements of the post- financial crisis world Barclays has become overly complex and cost-heavy. It is not always the case that more resources and extra processes make a financial institution safer or more resilient. Complexity can lead to accountability or responsibility being unclear at times, and to unnecessary cost; being simpler is often safer, and more cost efficient. In other words, how we operate is as important as the shape of the business model. There are a small number of business lines which we plan to exit in 2024, but these are not particularly material to the performance challenge. The big task is to execute Venkat's ambition to be consistently excellent. The simplification of processes and the streamlining of management layers in the bank are fundamental to this. This process is well underway and it lay behind the decision to take a significant fourth quarter restructuring charge last year. The valuation challenge is obviously less directly under our control. The Board’s view remains that the diversified returns strategy which we pursue is the right one. However, it brings business complexities, and there is a scarcity of comparable banks in Europe. Barclays PLC Annual Report 2023 05 Our commitment to the Investment Bank remains strong, and its priority over the next few years, having reached overall scale, is to become more capital efficient and thus profitable, in part through improved prioritisation around activities and clients. The cost structure also requires some work. Given this, we do not envisage needing to add materially to the capital deployed in the Investment Bank. At the same time we will step up investment in the consumer businesses of Barclays on both sides of the Atlantic. As a result, we expect the allocation of capital within the bank to shift, with Markets and Banking coming to represent a rather lower proportion of RWAs over coming years. We think that this balance, as long as it is reinforced by continuing returns at the appropriate level, should improve investor sentiment towards this business. Secondly, we continue the journey to make sure that investors have more confidence in where and how we make money. Our disclosures around risk and profitability have improved markedly over the last few years and we remain committed to doing more. The new divisional reporting arrangement will help here, including being transparent about those areas of the business where profitability improvement is most needed. In his letter to shareholders Venkat sets out in more detail his vision for Barclays, including new financial targets, and a clear plan to achieve them. Note: 1 Excluding the impact of Q423 structural cost actions. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Chairman’s introduction (continued) This path to a simpler, better and more balanced bank is not just based on the work around Barclays’ shape, strategy and financial performance. It is also intimately tied to our expression of Purpose, which we have also decided to streamline to emphasise the way in which we need to operate. ‘Working together for a better financial future’ expresses our drive to deliver high quality products and services which help to improve livelihoods for customers and clients, helping them with the finance and advice to innovate, invest and grow. And for our communities, it is about using our scale and capabilities to fulfil potential. It is also clear that a greater focus on the consumer and on the UK as a whole are crucial here. During 2023, we continued to make progress to meet our ambition of being a net zero bank by 2050. Capital is critical for a successful energy transition and we are targeting our financing and resources to energy companies committed to decarbonise and investing to enable the transition in the real economy. I am pleased to report that in 2023 we financed $67.8bn of Sustainable and Transition Financing, contributing towards our target of $1trn by the end of 2030. In addition, earlier in February we published a revised energy policy to progress our climate strategy, with a commitment not to directly finance energy companies' new oil and gas projects, consistent with the IEA NZE scenario, and setting clear expectations of transition strategies and decarbonisation requirements for our clients. This policy change is an important lever for reducing our financed emissions as we continue towards aligning our financing portfolio to the goals of the Paris Agreement. As you read this report you will also find powerful testimonies as to how Barclays is supporting our communities, including in our UK home market. In 2023 we marked the ten year anniversary of Barclays’ LifeSkills programme, which has helped millions of people transform their futures through its employability tools and learning resources. Our partnerships with sport are another meaningful demonstration of how we can support the development of vital skills and confidence which are critical to the future success of our communities. Building on our comprehensive sponsorship of girls’ and women’s football since 2019, in 2023 we debuted as the Official Banking Partner of Wimbledon, integrating it with our existing programmes to support employability and skills, our focus on sustainability, and connecting clients, customers and communities. The UK has been Barclays’ home for over 300 years and as such we play an active part in its economic success. Against a backdrop of constrained public finances, high inflation and interest rates, we recognise the increasing imperative for financial institutions to play a prominent role in fostering sustainable economic growth. We have continued to do just that through 2023, from our growing network of Barclays Eagle Labs supporting entrepreneurship, to our close participation in public policy consideration of how the UK’s capital markets can be bolstered to unlock business growth. The various threads of our performance I have recounted are only made possible by the steadfast dedication and hard work of colleagues. On behalf of the Board I would like to thank all of them for their ongoing commitment to serve our stakeholders, and to deliver Barclays’ success. I am also grateful to all of my Board colleagues for their contributions this last year. We welcomed Marc Moses to our Board in January 2023 and Sir John Kingman to our Board and as Chair of Barclays Bank UK PLC in June 2023. Both bring a deep experience of financial services. Julia Wilson, who joined the Board in 2021, took over as Chair of the Audit Committee in April 2023 and you can read her letter to shareholders on page 166. I would also like to reiterate my thanks to Mike Ashley and Crawford Gillies who retired from the Board during 2023, having supported Barclays through a period of considerable change during their tenure. Barclays PLC Annual Report 2023 06 I look forward to discussing Barclays’ performance in 2023 and plans for the year ahead at our Annual General Meeting on Thursday 9 May 2024 in Glasgow, which is the home of our net zero campus and base for over 5,000 colleagues. The meeting will take place at the Scottish Events Campus, Armadillo, Glasgow and shareholders will be invited to participate in person or online. 2024 will be notable as we renew our focus on delivering high quality products and service to our customers and clients, and on improving our returns to investors. Nigel Higgins Chairman Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Chief Executive’s review Barclays PLC Annual Report 2023 07 Our ambition to be the UK-centred leader in global finance “By being Simpler, Better and More balanced, we can deliver greater shareholder value by 2026.” C. S. Venkatakrishnan Group Chief Executive Over the last decade we have made good progress building strong customer franchises in the UK and US, alongside the leading markets and banking business outside the US. We have also strengthened the bank financially, and improved our returns. From these strong foundations, we have a vision for the shape of a better run, more strongly performing and higher returning Barclays. Introduction Our progress and performance During this year, as in the previous one, we have seen increasing political and economic tensions around the world. Resurging nationalism is precipitating global decoupling, reversing the ratcheting integration of preceding decades. The effects are reflected in increasingly restrictive trade policies, subsidies, mistrust even among allies, and the resurgence of real conflict. This riskier market, economic and political environment has several important implications for a global financial institution like Barclays. Notwithstanding global fragmentation, investors continue to need access to world markets. We have to provide this while managing the relatively higher risk of doing so. In the last decade, Barclays has largely curtailed or entirely shut retail operations in Africa, India and Europe. Our footprint today, operating in London and New York, and across major global financial centres, positions us well for this increasingly polarising world. Perhaps most relevantly, our home in London, remains one of the leading capital market centres. We have built a strong position in the UK market, the product of more than three centuries of commitment, with c.20 million personal customers. In the last two decades, we have also built a growing customer franchise in the US, working in partnership with prominent US brands like Gap Inc. and American Airlines, through which we serve c.20 million credit card customers. In parallel, we have established the leading international markets and banking business headquartered outside the US. Barclays Investment Bank has forged a global reputation for sophisticated execution and risk management, and is at a scale which competes directly with US peers. In Global Markets we are Top 1 , while in 3 in Credit and Fixed Income Financing Investment Banking we continue to maintain a 6th 2 position globally . We led on a number of prominent deals through 2023, including Arm’s IPO – the largest to price since 2021. Notes: 1 Coalition Greenwich Competitor Analytics, 1H23 Global Results. Analysis based on the following banks: Barclays, BofA Securities, BNP Paribas, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, J.P. Morgan, Morgan Stanley, UBS. Analysis is based on Barclays’ internal revenue numbers and business structure. 2 Dealogic for the period covering 1 January 2023 to 31 December 2023. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Chief Executive’s review (continued) Barclays PLC Annual Report 2023 08 Facts and figures £25.4bn Total income 2022: £25.0bn £6.6bn Profit before tax 1 2022: £7.0bn 10.6% Return on tangible equity1 2022: 11.6% 13.8%CET1 capital 2022: 13.9% As we have built our multinational footprint, we have also strengthened Barclays financially, and improved our returns. Over the last decade we increased our capitalisation from 10% to nearly 14% CET1, against a backdrop of accelerating digital transformation, an evolving regulatory landscape including Basel III, and significant economic and geopolitical disruption. Since 2021, we have delivered consistent underlying returns above 10%, through an uncertain operating environment. This strength and resiliency has enabled us to return c.£9bn in dividends and buybacks to our shareholders since 2019, and since 2021 we have distributed 33% of our market cap. With respect to 2023 we have announced c. £3.0bn in dividends and buybacks, an increase of 37% on 2022. We continued to deliver well in 2023, despite the mixed macroeconomic backdrop. Our income was £25.4bn, our CIR was 63% - in line with our target - and our RoTE was 10.6%, excluding the structural cost charge taken in Q4 2023. We generated a PBT of £6.6bn, and EPS of 32.4p. Our Vision I have considerable ambition for Barclays. Simply put, I want us to be the UK-centred leader in global finance. At our core we will have a comprehensive and pre-eminent UK consumer, corporate, wealth and private banking franchise, complemented by a strong, specialist US consumer bank. Alongside both will be the leading non-US based Investment Bank. I want Barclays to be renowned for excellent operational performance, strong product delivery, highly satisfied customers and clients, and robust liquidity, capital and risk management. The outcome of which is a strongly returning, highly valued global bank, centred in the UK, producing higher levels of total shareholder returns. Achieving our objective We are building from the strong foundations I set out earlier, but we know this is not reflected in our shareholder experience. We have spent time examining the path we are on, and the direction we will take going forward, as we know we need to do better. I believe Barclays is capable of delivering further value for our shareholders. We need to continue to improve our operational and financial performance, and improve total shareholder returns. To do so, over the next three years we aim to make Barclays Simpler, Better and More balanced. We will manage the bank along five focused business lines, each with ambition of scale and high returns. This will reduce the complexity of our reporting, and improve the accountability and transparency of each individual businesses performance. Our UK ring-fenced consumer bank – Barclays UK (BUK) – today delivers consistently high returns, has entrenched scale, with full presence across products and clients. We will aim to establish a leadership position in the UK, ever-improving our customer propositions and service. Our emphasis is on regaining share within credit cards and unsecured lending, and delivering greater operational and cost efficiency. We aim to reduce our CIR from 58% in 2023 to c.50% in 2026. We will split out Consumer, Cards and Payments (CCP) into three, separately reported businesses: Barclays US Consumer Bank, Barclays UK Corporate Bank and Barclays Private Bank & Wealth Management. Barclays US Consumer Bank (USCB), is a specialist partnership credit card provider in the US, with a market leading position in Travel and Airlines. Notwithstanding the lower RoTE in 2023 which is explained on page 21 of the Annual Report, we aim to be a partner of choice for America’s leading brands, particularly in Retail, achieving an ever- more diversified portfolio of blue-chip clients. We will continue to invest in a scalable digital platform to increase operating efficiency, and sophisticated capital management techniques to enhance risk-adjusted returns. We will also seek to build further on our strengths in Barclays UK Corporate Bank, which has a long and successful history of fostering enterprise in the UK. We have relationships with 25% of UK 2 , and see more than two in five of the corporates UK’s credit and debit card transactions. We aim to build on this strength, expanding our share in lending, and modernising our systems to improve self-service capabilities. Barclays Private Bank and Wealth Management represents a significant opportunity to strengthen our retail and mass affluent franchise, linked to our strong consumer franchise and complementing our UK-centred Private Bank. We will offer robust financial management tools, priced fairly, managed transparently, constructed simply and delivered efficiently, in order for our clients to grow wealth responsibly at each stage of their personal financial journeys. Barclays Investment Bank today is the leading non-US based international markets and 3 investment banking business . It is at scale, with deep client relationships and a global reputation for sophistication in execution and risk management. Note: 1 Excluding the impact of Q423 structural cost actions and the Over- issuance of Securities in the prior year. 2 Relationships from which we generate >£500 income per annum from our existing product set from companies (not legal entities) with annual income of >£6.5m across UK Corporate and Corporate within the Investment Bank. 3 #6 Global Markets and Investment Banking. Global Markets rank based on Barclays’ calculations using Peer reported financials. Top 10 Peers includes Barclays and; US Peers: Bank of America, Citi, Goldman Sachs, JP. Morgan, Morgan Stanley. European Peers: BNP Paribas, Credit Suisse, Deutsche Bank, UBS. Investment Banking rank based on Dealogic as at 31 December 2023. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Chief Executive’s introduction (continued) We aim to consolidate our position, broadening and deepening client relationships, monetising our investments in technology and capital, and driving stronger returns. To support this journey, we have moved the International Corporate Banking business into Investment Banking. Operating our bank, and each of our businesses, extremely well is fundamental to improving and de-risking our financial outcomes. We will continue to drive operational and process efficiency across the group, by streamlining our workforce, simplifying decision making, upgrading legacy system architecture, and accelerating the pace of delivery. This will deliver improved cost income ratios across every business, even as we invest to drive better returns and improve resilience. I am also clear we must manage the bank in a consistently excellent way, to avoid unexpected and unnecessary losses from operational errors and give continued confidence to our stakeholders. We have implemented a group- wide culture programme – Consistently Excellent – establishing a very high operating standard for the firm, and targeting best-in-class service across the group. We are making progress advancing this high standard across the bank as numerous examples throughout this Report will attest, but we have more to do as we aim to make it the essence of Barclays. Financially, we will increase the allocation of capital to higher-returning businesses. Over the next three years we will deliver a more evenly balanced allocation of RWAs, with more capital deployed to our highest returning consumer businesses, which attract higher investor multiples. RWAs in Barclays UK, Barclays UK Corporate Bank and Barclays Private Bank and Wealth Management will increase by around 4% points as a proportion of total RWAs. By no means is this to diminish the importance of our Investment Bank; rather, it is to place our consumer and corporate businesses on a similarly strong footing. Over the medium-term this will rebalance Barclays RWAs across our consumer and wholesale businesses, to support more consistent and higher returns. By being Simpler, Better and More balanced, we can deliver greater shareholder value by 2026. Our new financial framework includes a target to generate a Return on Tangible Equity of greater than 12% by that time, and to return at least £10 billion to shareholders via a mix of dividends and 1 buybacks . Shaping Barclays for the future The business, operational and financial goals which we have outlined are an important part of success, but they are not all of it. In the increasingly multi-polar world we described at the outset, we must choose what we want to be and where. This year signifies our strengthened commitment to the UK. The UK economy continues to prove relatively resilient to global shifts and, as a UK headquartered bank, we are deeply rooted in our domestic market. With a renewed focus on businesses in which we can be successful, and a re-emphasis on delivering excellent customer service, we can build on our valuable brand and capture even more opportunity in our home market. Note: 1 This multiyear plan is subject to supervisory and Board approval, anticipated financial performance and our published CET1 range of 13%-14%. Conclusion Our commitment to, and deep roots in, the UK have shaped our vision. As part of this resolve, we are purposefully engaged in initiatives to advance UK prosperity, from levelling-up essential life skills for 3.27 million people during 2023, to supporting ambitious start-ups and scale-ups across the UK. At the heart of the activity and ambition which I have detailed throughout this letter are our colleagues. Our success is driven by their hard work and dedication and to support our customers, clients and communities. I am pleased to note that Barclays is ranked as Number 1 on LinkedIn’s 2023 UK Top Companies list for the third year in a row, demonstrating that we have built an organisation of mutual respect and appreciation, and one in which our colleagues have opportunities to thrive. 2024 will be a crucial year for Barclays. To change the way we operate and achieve sustainable success will take strenuous effort, relentless focus and time. I am confident that our clear plan will achieve these objectives, and take us to new heights. Thank you. C. S. Venkatakrishnan Group Chief Executive Barclays PLC Annual Report 2023 09 Our Priorities Simpler Simpler business Simpler organisation Simpler operations Better Better returns Better investments Better quality income Better customer experience and outcomes More balanced More balanced allocation of RWAs More balanced geographical footprint Read more about our priorities on Page 13 + Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Our business model Working together for a better financial future We deploy our resources... to serve the financial needs of our diversified customer base... We draw on tangible and intangible assets to drive long-term, sustainable value creation. Our people, Purpose, Values and Mindset Our people are our organisation. We deliver success through a purpose-driven and inclusive culture. Our brand Our brand equity instils trust, lowers the cost of acquiring customers and clients and helps retain them for longer. Technology and infrastructure Our deep technology and infrastructure capabilities drive customer experiences and support strong resiliency. Operations and governance Our risk management, governance and controls help ensure customer and client outcomes are delivered in the right way. Due to our wide range of products and services across markets, we define ourselves as a ‘universal bank’. Moving We facilitate transactions and move money around the world. Lending We lend to customers and clients to support their needs. Connecting We connect companies seeking funding with the financial markets. Protecting We ensure the assets of our clients and customers are safe. Investing and advising We help our customers and clients invest assets to drive growth. Barclays PLC Annual Report 2023 10 Our universal banking model enables us to create synergies across the organisation and deliver long- term value for our stakeholders. delivering value through synergies... providing clear outcomes for our stakeholders. We bring our organisation together to create synergies and deliver greater value. Our diversified model provides the resilience and consistency needed for the road ahead. Providing customers and clients with the full range of our products and services. Applying Group-wide technology–platforms to  deliver better products and services. Joining up different parts of the Group so capabilities in one can benefit another. Making the Group more efficient. Customers and clients Supporting our customers and clients to achieve their goals with our products and services. Colleagues Helping our colleagues across the world develop as professionals. Society Providing support to our communities, and access to social and environmental financing to address societal need. Investors Delivering attractive and sustainable shareholder returns on a foundation of a strong balance sheet. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 11 Our strategy Within this section we review Barclays in the current environment, provide an overview of core strengths and capabilities of the business, and set out our vision and strategy to drive improved performance. Our business environment Our plans and targets Our new divisional structure Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Our business environment Barclays PLC Annual Report 2023 12 The world in which we operate Barclays is driven by a common Purpose: working together for a better financial future. To do so, we must be strong as an institution, prepared for the future, and able to navigate different market conditions and evolving trends. We regularly review our operating environment for emerging trends and adapt to address them. In 2021, we called out three long-term trends and continue to make good progress addressing these, as you will find detailed throughout the report: The impact of technology on consumer products and services The role of capital markets as the principal drivers of global growth The transition of the global economy towards a low-carbon economy Context: We actively navigate risk and uncertainty, and are vigilant to deliver for our customers, clients, and shareholders in any environment. Primary considerations Geopolitical • Elections in over 70 countries during 2024 • Conflict in Ukraine and Middle East • US-China relations Further considerations Climate: • Energy transition • More extreme climate cycles Technology: • Generative AI, and related impact from regulators and cybersecurity • FinTech adoption Regulatory: • Basel 3 endgame, and related regulated responses from countries including effects of AIRB regulations in the US Recently, we have adjusted our strategy and operating model to reflect changes in the environment we operate in, and evolving demands from our customers, clients, regulators and shareholders. Macroeconomic • Economic uncertainty: higher inflation and interest rates • Higher systemic risk and volatility Delivering our three-year plan Our Purpose Our Vision Our Priorities We want Barclays to be renowned for an excellent operational performance, highly satisfied customers and clients, strong liquidity, capital and risk management, and predictable, attractive shareholder returns. Building on our strong foundations, we have a clear plan to achieve these objectives and deliver further value for shareholders by 2026. Over the next three years we will make Barclays Simpler, Better and More balanced. Read more about our updated strategy at: home.barclays/strategy + Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Our plan and targets Barclays PLC Annual Report 2023 13 We have a clear plan to improve our operational and financial performance, and improve total shareholder returns. To do so, over the next three years we will make Barclays Simpler, Better and More balanced. Working together for a better financial future The UK-centred leader in global finance Simpler Simpler business • Five focused businesses Simpler organisation • Reduce organisational complexity • Simplify decision making Simpler operations • Continue to upgrade legacy technology • Further uplift operational controls Better Better returns More balanced More balanced allocation of RWA • Improve performance across all our businesses Better investments • Investments in cost efficiency, and revenue and growth protection Better quality income • Capital allocation to our highest returning businesses • Barclays Investment Bank c.50% of Group RWA by 2026 More balanced geographical footprint • Focus growth in our home market • Diverse sources of income to support growth • Leverage our UK brand • Grow proportion of income from stable revenue streams Better customer experience and outcomes • Improve platform resilience and expanded offerings • Deliver best-in-class customer and client experience 2026 targets 2024 targets Note: Return on tangible equity >12% Total payout 2024-2026 at least £10bn¹ Investment Bank RWAs c.50% of Group Supporting targets Income c.£30bn Cost:income ratio High 50s% Return on tangible equity >10% (c.10.5% excluding inorganic activity) Group net interest income excluding Barclays Investment Bank and Head Office c.£10.7bn Supporting targets Barclays UK net interest income c. £6.1bn2 Cost:income ratio c.63% Loan Loss Rate (LLR) 50-60bps through the cycle Loan Loss Rate (LLR) 50-60bps through the cycle Continue to target a 13-14% CET1 ratio range 1 This multiyear plan is subject to supervisory and Board approval, anticipated financial performance and our published CET1 range of 13%-14%. 2 This excludes the impact of Tesco Bank acquisition, which is expected to generate annualised NII of c.£400m in the first year post completion. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 14 Our strategy (continued) Reporting the business through five divisions From Q1 2024, our reporting will reflect five new clear divisions. This will reduce the complexity of our reporting, and improve the accountability and transparency of performance. Barclays UK • Long-established scale player with trusted brand • Strong franchise deposit base (c.20m personal banking customers and c.1m business banking customers) • Well-performing lending book (c.5m credit card accounts) • Long-term RoTE track record Aims • Establish a leadership position in the UK • Focus on improving customer service propositions • Deliver greater operational and cost efficiency Barclays UK Corporate Bank • Deep and enduring franchise delivered across the UK through Aims >50 offices Award-winning expertise with an 18-year average client relationship and a >10% growth in clients vs 2021 Strong and resilient deposit base • • • Expand our share in lending • Modernise systems • Deliver more functionality to clients Barclays Private Bank & Wealth Management • One of the largest bank-led Private Bank and Wealth Management businesses in the UK, now able to support clients across the full wealth continuum International business aligned to our Investment Bank presence, focused on Ultra High Net Worth and High Net Worth clients • Aims • Strengthen our highly competitive UK wealth offering • Become the leading UK-centred Private Bank Barclays Investment Bank • At scale, focused Global Markets and Investment Banking franchises 1 • Leading non-US Investment Bank • Diversified, stable income with deep relationships with our largest clients • Strong risk and capital discipline Aims • Consolidate globally competitive Markets and Investment Banking businesses • Reallocate RWAs towards higher returning businesses and opportunities • Monetise investments in technology and capital • Broaden and deepen client relationships Barclays US Consumer Bank Notes: • 20+ years of expertise in US cards with deep partnership Aims card experience 2 2 • #9 US card issuer | #6 in US partner market • 20 client partners | c.20m customers • Prime book with average FICO >750 • Synergies with Barclays Investment Bank • Be a partner of choice for America’s leading brands, particularly in Retail • • Continue investment in a scalable digital platform Increase operating efficiency and enhance risk-adjusted return 2023 RWA allocation Barclays UK 21% Barclays UK Corporate Bank 6% Barclays Private Bank & Wealth Management 2% Barclays US Consumer Bank 7% Head Office 6% Barclays Investment Bank 58% Targeting a more balanced allocation in 2026 Non-Investment Bank businesses 1 #6 Global Markets and Investment Banking. Global Markets rank based on Barclays’ calculations using Peer reported financials. Top 10 Peers includes Barclays, Bank of America, Citi, Goldman Sachs, JP. Morgan, Morgan Stanley, BNP Paribas, Credit Suisse, Deutsche Bank, and UBS. Investment Banking rank based on Dealogic as at 31 December 2023. 2 Based on End Net Receivables. Source: Gate One, as at Q323. Barclays Investment Bank c.50% 2023£343bn2026 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 15 2023 divisional review Our reporting for 2023 divisional review on the following pages is based on our reporting divisions in place during, and as at the end of 2023, and therefore exclude changes to our operating structure as detailed in our 2023 Results Announcement. Barclays UK Barclays International – Corporate and Investment Bank Barclays International – Consumer, Cards and Payments Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements About Barclays A strong and stable universal bank Barclays PLC Annual Report 2023 16 During 2023, Barclays operated as two operating businesses, Barclays UK and Barclays International, supported by our service company, Barclays Execution Services. The following pages narrate the performance of these divisions during the year. As part of the 2023 Results Announcement, Barclays announced a revised operating structure to deliver value to stakeholders. The summary view of the new structure can be seen on page 14, and further detail of the 2023 Results Announcement, including revised divisional financials can be found at: home.barclays/investorrelations Barclays UK Barclays International £2.9bnPBT £73.5bn RWAs 19.2%RoTE £4.6bnPBT £259.1bn RWAs 8.2%RoTE Barclays UK consists of our UK Personal Banking, UK Business Banking and Barclaycard Consumer UK businesses. These businesses are carried on by our UK ring- fenced bank (Barclays Bank UK PLC) and certain other entities within the Barclays Group. UK retail and business banking + Read more: page 17 Barclays International consists of our Corporate and Investment Bank and Consumer, Cards and Payments businesses. These businesses operate within our non ring-fenced bank (Barclays Bank PLC) and its subsidiaries, and certain other entities within the Group. Corporate and Investment Bank + Read more: page 19 Consumer, Cards and Payments + Read more: page 21 Barclays Execution Services Barclays Execution Services (BX) is the Group-wide service company providing technology, operations and functional services to businesses across the Group. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 17 Barclays UK Barclays UK Barclays UK consists of our UK personal banking, UK business banking and Barclaycard Consumer UK businesses. Business description Focus areas • Offering banking services that meet the needs of today’s and tomorrow’s customers and clients, making money work for them. • Pursuing digital innovation and helping colleagues focus on value-adding customer interactions. • Making our customers’ communities better tomorrow than they are today, and seeking out opportunities for an inclusive and sustainable future. • UK Personal Banking offers retail solutions to help customers with their day-to-day banking needs. • UK Business Banking serves business clients, from high-growth start-ups to SMEs, with specialist advice. • Barclaycard Consumer UK is a leading credit card provider, offering flexible borrowing and payment solutions while delivering a leading customer experience. Measuring where we are £7.6bn Income 2022: £7.3bn £4.4bn Operating expenses 2022: £4.3bn £2.9bn Profit before tax 2022: £2.6bn 19.2% Return on tangible equity 2022:18.7% Year in review Barclays UK has been customer-focused and community-based for 333 years. In 2023 we focused on strengthening our customer and client propositions and improving our execution. Our strong franchise and valuable brand are reflected in our financial performance, with Barclays UK delivering a RoTE of 19.2%. Notwithstanding these results, and our progress over the course of 2023 to refine and enhance our customer service, we know we have more to do. During 2023, cost of living pressures and the rising interest rate environment continued to impact our customers in the UK. In response we enhanced the tools and information available to customers via our Money Management Hub – helping them better understand their spending and the steps they can take to improve their financial wellbeing. We also launched our Money 1:1 service, offering customers a personalised financial coaching session with a specially trained Barclays Money Mentor. To boost customers’ long-term financial resilience we provided options to switch to interest-only mortgages for six months and extensions of their mortgage term where appropriate. Additionally, we helped over 103,000 new customers get on or move up the housing ladder during 2023 – including 33,000 first- time buyers. We also proactively contacted 1.2 million customers to let them know they could earn more interest by moving to a different savings product. For our business clients, we ran more than 900 Business Health Pledge masterclasses during 2023. As part of our customer-centricity we remained focused on improving our customer experience, combining the best of digital with the human touch. The transformation of our physical service model means we are able to provide in-person support in our communities, while serving our customers more sustainably. In 2023 we expanded Barclays Local by more than 159 new sites and now have 351 sites in total – in addition to 306 branches and 16 mobile service points (vans). We are also participating in innovative new Shared Banking Hubs. Improving existing propositions and adding innovative new ones are important ways we continue to drive growth in Barclays UK. To this end, in 2023 we completed the acquisition of Kensington Mortgage Company – an award-winning mortgage 1 lender known for its strong support of specialist customer groups and the intermediary market. Our Savings strategy is to help customers develop smart savings habits while supporting those already saving to make their money work harder. We offer personal customers interest rates of up to 5%, with our flexible products designed to help customers achieve their goals. For example, customers can segregate money from current accounts to develop savings habits, while Barclays Blue customers are rewarded with a higher rate in the months they have no withdrawals. In parallel, we continue to make good progress to ensure digital banking with Barclays is smooth, easy and rewarding – including by improving the navigation and functionality of our app. As a consequence, active app customers increased 5% year on year in 2023. Across all our channels, over 80% of our customer transactions are now digitally enabled – up from 76% in 2022. While we will continue to help customers recognise and embrace the ease and convenience of our digital capabilities, our focus moving forward will shift to improving the depth and quality of engagement from customers already actively using them. To further strengthen our customer propositions we also launched Visa Cashback Rewards, giving Barclays Blue customers cash back on their everyday spending. Our progress to improve the customer experience in 2023 is reflected in Barclays UK’s improved Net Promoter Score, which increased by six points versus 2022. We recognise there is still more to do to improve our customer propositions and execution, and we will remain focused on doing so. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 18 Barclays UK (continued) Our focus on making communities better tomorrow than they are today is reflected in our growing network of Barclays Eagle Labs. Our 37 business incubators across the UK – which include nine new locations added in 2023 – are part of our ambition to be a bank where entrepreneurs start, scale and achieve their growth ambitions. In 2023 Eagle Labs supported over 4,500 businesses, while Barclays UK more broadly supported over 47,000 new start-up or scale-up customers – including Climate Tech start-ups working on innovative technology to deliver a more sustainable future. We were also entrusted by the UK Government with a £12m Digital Growth Grant to further support the growth of UK tech start-ups and scale-ups over the next two years. The Grant will help deliver 20 national programmes and more than 8,000 business interventions, including our Sustainability Bridge programme, to enable ambitious entrepreneurs. Another key way we support customers is through our focus on sustainability. This year we expanded and improved sustainability-related propositions for customers, including a new Green Barclayloan for Business that offers no arrangement fees for lending above £25,000 on a range of green assets – supporting our business customers in their transition to net zero. We also expanded our existing Asset 2 Finance proposition via our partner Propel , offering business customers fixed rates on a wider range of green assets, including new fully electric vehicles and solar photovoltaic panels. Additionally, we extended our Greener Home Reward scheme, which offers a cash reward of up to £2,000 for eligible residential mortgage customers who install eligible energy- 3 efficiency-related measures in their homes. Note: 1 In 2023 Kensington Mortgage Company won 'Best Specialist Mortgage Lender' at both the What Mortgage and Your Mortgage Awards. It was also named 'Best Intermediary Lender' at the Personal Finance Awards and 'Best Online Mortgage Provider' at the Moneyfacts Awards. 2 Further detail can be found at barclays.co.uk/business-banking/borrow/ asset-finance/ 3 Further detail can be found at barclays.co.uk/mortgages/greener-home- reward/ Shared Banking Hubs To reflect the shift in demand away from traditional bank branches – and the need to improve efficiency for those who still require in-person services – Barclays has participated in the creation of innovative new Shared Banking Hubs. These are physical spaces, similar to a traditional bank branch but shared between customers of any high street bank. The Hubs consist of a counter service operated by Post Office colleagues, where customers can withdraw and deposit cash, make bill payments and carry out regular banking transactions, in addition to private spaces for financial conversations. Over 100 Hubs have been announced by Cash Access UK in locations across the UK, helping Barclays UK provide our services in a better and more efficient way while serving our communities. Kensington Mortgages In March 2023 Barclays bolstered its support for the UK mortgage market by purchasing Kensington Mortgages, the UK’s leading residential specialist mortgage lender. Kensington Mortgages brings over 25 years’ experience of providing innovative and flexible mortgage products, serving fast- growing customer groups including the newly self-employed, contract workers, borrowers with multiple sources of income, and those with a weaker credit history. This acquisition broadens our existing mortgage product range and further enhances our product capabilities. “We are creating more opportunities for our customers to connect with us outside of the traditional branch, putting us at the heart of local communities." Melanie Tweddle, Everyday Customer Care Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Corporate and Investment Bank Barclays International: Corporate and Investment Bank The Corporate and Investment Bank helps money managers, financial institutions, governments, supranational organisations and corporate clients manage their funding, investing, financing, and strategic and risk management needs. Focus areas Business description • Leveraging the Power of One Barclays¹ to deliver world-class service for clients. • Capitalising on our top-tier Global Markets franchise, focusing on areas of excellence across our diversified business model. • Capturing opportunities in our global, scaled Investment Bank franchise. Note: 1. The Power of One Barclays is about colleagues uniting across businesses to put our clients' needs first. By working as a cohesive unit - collaborating, sharing expertise and information - we can deliver the best outcomes for our clients. Measuring where we are • Global Markets offers clients a full range of liquidity, risk management and financing solutions, as well as ideas and content tailored to their investing and risk management needs - coupled with execution capabilities - across the spectrum of financial products. • Investment Banking provides clients with strategic advice on mergers and acquisitions (M&A), corporate finance and financial risk management solutions, as well as equity and debt issuance services. • Corporate Banking provides working capital, transaction banking (including trade and payments), and lending for multinational, large and medium corporates, and for financial institutions. £12.6bn Income 2022: £13.4bn £8.5bn Operating expenses 2022: £8.9bn £4.1bn Profit before tax 2022: £4.3bn 8.4% Return on tangible equity 2022:10.2% Year in review In 2023 we experienced a challenging market and wallet environment, characterised by inflation, macroeconomic uncertainty and heightened geopolitical tensions. These conditions contributed to subdued primary market activity, as reflected in the 16% year-on- year decline in the global 1 . investment banking wallet Against this backdrop, the Corporate and Investment Bank (CIB) delivered a 8.4% RoTE (2022: 10.2%). Our resilient CIB performance reflects the benefits of our income diversification, the strength of our client relationships, and close collaboration across Investment Banking, Corporate Banking and Global Markets. In Investment Banking, we continued to deliver for our clients through rigorous focus, consistent execution and a strong solutions mindset. We 2 ranked sixth globally in 2023 , and in the UK we topped the investment banking league table - in 3 fees earned - for the first time in six years . Additionally, we continue to excel in areas of traditional strength, such as Debt Capital Markets 2 where we rank fifth globally , and we are successfully expanding in priority areas such as Equity Capital Markets, where our share grew by 70bps. Among the year's highlights, Barclays was proud to serve as Joint Global Coordinator and Billing & Delivery Agent on Arm’s IPO. Please see the facing case study for further information. In Global Markets, we continue to be a leading provider of liquidity to institutional clients around the world, helping them find opportunities and manage risk. Our clients recognised Barclays for our level of service amid continued market volatility as we were named Interest Rate Derivatives House of the Year by Risk magazine, as well as Credit Derivatives and Equity House of the Year by IFR. Note 1 Dealogic Banking wallet as at December 31st 2023 for the period covering 2022 to 2023. 2 Dealogic for the period covering 1 January 2023 to 31 December 2023. 3 Data from Dealogic, UK Investment Bank revenue by bank, full year 2023. Barclays PLC Annual Report 2023 19 Arm IPO In 2023 Barclays helped British semiconductor design company Arm become a publicly listed company through an Initial Public Offering (IPO) on the Nasdaq stock exchange. Barclays acted as Joint Global Coordinator and Billing & Delivery Agent on the IPO. The US $5.2bn offering is the largest IPO to price in 2023. This transaction demonstrates the power of our Investment Banking and Global Markets businesses working together to deliver outstanding outcomes for our clients. This resulted from focused and consistent client coverage from across the entirety of our franchise - from ECM to Global Markets - and with teams from across Asia, the UK, and the US. It also reflects the value in building multi-year relationships with top clients. Barclays has had a relationship with Softbank for 18 years, over which we have executed numerous transactions. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Corporate and Investment Bank (continued) The CIB continues to play a fundamental role in Barclays’ commitment to invest in the transition to a low-carbon economy. This includes delivery towards the Group target to facilitate $1tn of Sustainable and Transition Financing by the end of 2030, providing green, sustainable and transition products and services that will support our clients and the global economy to accelerate the transition to net zero. In addition, we continue to invest thoughtfully in our talent to meet client demands and deliver the best service. In early 2024 we announced the formation of a new Energy Transition Group to support our ambition to be a leading adviser and financier to clients as they transition to a low- carbon future. In Corporate Banking, revenues grew off the back of elevated deposits income which continued to benefit from a strong net interest margin, and increased deposit balances from clients. We continued to make progress expanding our international capabilities, building out our Corporate Banking businesses in the US and Europe, alongside strengthening our digital capabilities globally to provide our clients with seamless access to our transaction banking product set. We continued to grow share of wallet with our Global Markets top 100 clients. Income from our top 100 clients is up 5% year on year, despite lower client activity in markets across the industry. Additionally, client market share data for the first half of 2023 indicates our Global Markets business now ranks fifth globally (up from sixth) 1 . with institutional clients Our focus remains on delivering sustainable through-the-cycle returns and we have the breadth of capabilities across Fixed Income and Equities, combined with a top tier Financing business, to deliver on this. We continued to make progress against some of our key strategic initiatives, which offset compressed financing spreads and a weaker environment for intermediation. In parallel, we continued to grow our financing capabilities to deliver more stable, higher returning income. Over the past five years our ranking in Prime Services has moved up from 7 rank to joint 5 rank, complementing our existing strength in Fixed Income Financing where we ranked joint 2 . 1 for 2023 Our Research team provides industry-leading analysis and investment advice for our institutional clients. For the second year in a row, Barclays ranked Top 3 for Fixed Income 3 Research in Institutional Investor Research 2023 rankings - and Top 5 in European Equity 3 Research for the first time - underscoring the value clients and investors place on our differentiated content. “Our clients have bold visions for the future. Through a deep understanding of their needs, and by utilising our full capabilities across the CIB, we have helped them achieve their goals at pace.” Dan Grabos, Co-Head, Americas M&A Note: 1 Based on Barclays analysis using internal and external sources. 2 Coalition Greenwich Competitor Analytics, 1H23 Global Results. Analysis based on the following banks: Barclays, BoA, BNP, CITI, CS, DB, GS, JPM, MS and UBS. Analysis is based on Barclays' internal revenue numbers and business structure. 3 institutionalinvestor.com/section/research Barclays PLC Annual Report 2023 20 Nextracker’s IPO and first Follow-on Offering Nextracker, a leading provider of intelligent, integrated solar tracker and software solutions for utility-scale and distributed generation projects, partnered with Barclays’ investment banking teams to successfully raise $734m through its IPO in February 2023 and $662m through its first Follow-on Offering in July 2023. As Joint Lead Book-Running Manager on the IPO and first Follow-on Offering, Barclays’ Equity Capital Markets and what is now known as the Energy Transition Group worked closely with Nextracker’s management, advising on the structure, marketing and execution of both deals. The deals highlight the strength of Barclays’ Equity Capital Markets and Energy Transition Group franchises and further Barclays’ leadership in the renewable energy industry. See here for further information: cib.barclays/investment-banking/ financing-the-future-of-solar-energy-with-nextrackers-ipo.html + Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Consumer, Cards and Payments Barclays International: Consumer, Cards and Payments f The Consumer, Cards and Payments division of Barclays International comprises our International Cards and Consumer Bank, Private Bank and Wealth Management, Barclaycard Payments and Consumer Bank Europe businesses. Focus areas Business description • Developing new financial products and capabilities to reflect growing trends, to drive growth in our strategic home and international markets. • Creating an enhanced digital customer experience to build a more efficient business. • Broadening relationships with existing • Our US Consumer Bank offers co-branded and private-label credit cards, online retail deposits products, personal loans and instalment payments. • Private Bank and Wealth Management provides UK and International clients with access to the full spectrum of wealth and private banking services. partners, pursuing new partnerships, and building capabilities to offer new financing solutions across all markets. • Barclaycard Payments provides a unified experience for making and receiving payments in-store and online. • Consumer Bank Europe offers own- branded and co-branded credit cards, online loans, electronic Point of Sale (ePOS) financing and deposits. Measuring where we are £5.3bn Income 2022: £4.5bn £3.3bn Operating expenses 2022: £3.1bn £0.5bn Profit before tax 2022: £0.7bn 6.7% Return on tangible equity 2022: 10.0% Year in review Consumer, Cards and Payments (CC&P) delivered a RoTE of 6.7% (2022: 10.0%). Our performance was driven by the impact of higher impairment charges, partially offset by deepening client relationships and market share in growth businesses, alongside continued digital innovation to enhance propositions and services. The strength of our client relationships is reflected in the performance of our US Consumer Bank (USCB), where income is up 24% year on year – driven by our leading position as 1 . the card of choice in the travel & airlines sector Building on the success of our partnership with Gap Inc., we announced a new partnership with Breeze Airways to issue its first consumer credit card programme. In addition, USCB launched a new partnership with Microsoft and Mastercard to issue Xbox’s first co-branded credit card in the US. USCB’s retail deposits have grown 14% year on year, reflecting excellent competitive positioning, brand strength, and the broadening of our partner base. Continued investment in and focus on, enhancing digital propositions played an important role across our specialist businesses. In USCB, mobile app enhancements – including enabling facial biometrics ID as part of app authentication – helped boost the Android app star rating to 4.7 out of 5 in 2023, up from 4 in 2022. Barclays PLC Annual Report 2023 21 As further testament of improvements to our digital platform, our USCB Digital tNPS – a newly tracked metric for USCB measuring customer experience at the digital journey level – increased from 59.8 in 2022 to a full year average of 61.3 in 2023. In parallel, we have remained focused on enhancing our product capabilities. In the first half of 2023 we launched the new JetBlue programme, a complete redesign to align with the airlines' new loyalty programme. Subsequently, we were recognised by J.D. 1 Power for the JetBlue Plus Card, issued by Barclays, which ranked the highest among co- branded airline credit cards - demonstrating the value it offers customers. The successful integration of Private Bank and Wealth Management in 2023 is helping build our advantage in reach and specialist capability. Combined income for 2023 is £1.2bn, alongside Client Assets and Liabilities of £74.1bn and invested assets of £108.8bn. Alongside the integration there has been an ongoing focus on enhancing the client experience, reflected in the launch of the Wealth Hub to 1.2 million Premier customers in Barclays UK, and providing UK Private Bank clients with an enhanced service experience. Similarly, in Barclaycard Payments we saw a 29% year-on-year increase in digital logins and a corresponding 10% reduction in customers using our call centres, supporting our increased efficiency. This momentum reflects the introduction of new digital features – including the launch of Smartpay Anywhere and Smartpay Fuse, enabling small business customers to take online payments as part of a seamless experience. Note: 1 ir.jetblue.com/news/news-details/2023/JetBlue-Plus-Card- Issued-by-Barclays-Earns-J.D.-Power-Award-For-Ranking- Number-One-Among-Airline-Co-Branded-Credit-Cards/ default.aspx Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Consumer, Cards and Payments (continued) Xbox Barclays US Consumer Bank further diversified its credit card portfolio with the launch of the Xbox Mastercard, Microsoft’s first co-branded card in the US. Using research and insights, the credit card product was custom-built to provide the Xbox community with an immersive digital experience across the entire customer journey – from applying through the Xbox console and web, to earning and redeeming their card rewards, and personalising their card with their gamertag on one of five iconic Xbox-inspired designs. Created with customer- and client-centricity in mind, the card aims to heighten enjoyment for Xbox players while deepening their loyalty and enhancing engagement with one of the world’s most recognised brands. It is currently available for Xbox Insiders in 50 US states through Microsoft digital channels including xbox.com. We continued to build our client portfolio, signing new business deals in 2023 with prominent brands including department store Fenwick and plumbing and heating specialist Wolseley. Barclaycard Payments and Barclays Corporate Banking were chosen by Fenwick to provide a range of banking and payment services to support the growth and digitisation of the business – testament to the breadth of our business services, collaboration, and digital capabilities. Consumer Bank Europe delivered a strong performance, growing its deposit book 206% year on year, driven by our continued focus on enhancing the customer experience. We launched the in-app call facility to significantly improve the efficiency and speed of customer service. We also continued to be a leading provider of consumer finance through our credit cards and personal loans business. Private Bank and Wealth integration On 1 May 2023 Barclays completed the transfer of its UK Wealth Management & Investments business to sit alongside the Private Bank. The transition of 300,000 clients and 1,000 colleagues has created one of the largest bank-owned Private Bank and Wealth Management businesses in the UK. The combined business, Barclays Private Bank and Wealth Management, provides UK clients with access to the full spectrum of wealth and private banking services while opening up access to the broader key markets and wealth corridors where Barclays provides Private Banking in Europe, the Middle East, Asia and Africa. The integration will enable us to grow our client relationships in the UK and further develop our reputation as a trusted choice for Private Bank clients in selected international markets. Barclays PLC Annual Report 2023 22 ”We have continued our focus on customers' and clients’ experience, listening to their feedback to prioritise enhancements in our digital servicing channels.” Mike Robinson, Head of Customer, USCB Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 23 Our stakeholders In this section we cover how we listen and respond to our stakeholders, and create sustainable value for all those we serve. Customers and clients Colleagues Society Investors The KPIs featured throughout this section are used to monitor our performance and progress – they are also linked directly to Executive Director remuneration. Further detail can be found in the Remuneration report on page 191 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 24 Customers and clients Customers and clients We aim to build trust and loyalty by offering innovative products and services with an excellent customer and client experience. We seek to understand our customers’ and clients’ expectations and aspirations, and develop products and services to support them – especially during difficult economic conditions. Where to find out more: + Please visit our ESG resources hub for further information: home.barclays/sustainability/esg-resource- hub/reporting and disclosures/ Engaging with customers and clients Barclays is committed to serving our customers' and clients' best interests. To do so we regularly engage them, building our understanding of their evolving needs and enabling us to adapt our products and services accordingly. We engage in a wide variety of ways, including running regular surveys, analysing customer complaints, direct interaction and drawing on data from millions of individual transactions. Our engagement is most significant with respect to our large retail presence in the UK, where we offer a wide range of products and services to approximately 20 million customers through Barclays UK. Barclays UK runs on average eight panels per month for Personal, Premier and Business customers and clients to share their views on our products and services, and on their own financial health. These panels provide regular insights to bring us closer to our customers, and to inform our design principles and the transformation of our customer journeys. As described in the Barclays UK section of this report on page 17, inflation has been a dominant theme for customers during 2023 and we have adapted and enhanced our products and services to better serve them in response. One example is 1 our Barclays Money Worries Hub , which was launched to bring together the resources and advice our customers told us they needed in challenging economic times. This is in addition to our specific mortgages and personal savings initiatives also detailed on page 244. More broadly, Barclays UK collected over 1.4 million pieces of customer feedback in 2023. Customers told us they wanted their experiences with Barclays to feel more personal, as well as showing continued demand for increased convenience and functionality of the Barclays app. In response we have introduced new design principles to ensure every new or updated customer experience feels personalised, and have continued to develop the capabilities of our app. Our work to ensure a seamless digital experience for customers is one of the reasons we have more active digital users than any other 2 . UK bank While we continue to make progress addressing the volume of Barclays UK customer complaints, we recognise there is still more work to do to improve the overall customer experience and address and remove the root causes of customer complaints. This focus is at the core of our new vision and strategy as we work towards improving our propositions and execution in our consumer businesses, in order to deliver best-in-class service and ensure we have highly-satisfied retail customers. Customer and client feedback in Barclays US Consumer Bank has recently highlighted positive experiences with our specialists and customer agents, while areas for suggested improvement include making it even easier for customers and clients to interact with us. We are using this feedback to help prioritise improvements, for example simplifying the digital customer journey and reducing the need to contact our call centres as detailed on page 242. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Customers and clients (continued) Barclays PLC Annual Report 2023 25 Consumer Duty The new Consumer Duty marks the beginning of a step-change in UK consumer regulation, requiring firms to act to deliver good outcomes for retail customers – a principle underpinning Barclays’ ambition of being a consistently excellent organisation delivering best-in-class service for customers and clients. We have undertaken significant work to implement the Duty across the Group, and continue to embed this throughout the organisation. We continue to use and enhance data and insights to ensure our strategy, products and services for retail customers deliver the intended outcomes, with a focus on meeting the needs of people with vulnerable characteristics. For example, drawing on data and insights from our Rainy Day Saver product, we contacted over 1.2 million customers to advise them that alternative products may offer a better interest rate for balances over £5,000. In the Corporate and Investment Bank, reflecting on engagement with and feedback from our clients, we continued to build the expertise, knowledge and capabilities they are looking for. We strengthened partnerships across business lines to deliver a more integrated set of solutions and services to global clients, and growing client mindshare. Supporting customers and clients Our aim at Barclays is to offer an accessible, empathetic and inclusive service for our customers, including for those who may typically face barriers to accessing banking services – such as people living with disabilities, complex needs or experiencing difficult life events. During the course of 2023 we delivered a number of key measures to support the financial resilience of our customers against a challenging economic backdrop, including reaching out via SMS to 1.4 million customers to offer a free conversation about cost of living-related financial worries. In addition, we seek to support vulnerable customers and provide responsible and inclusive banking in an extensive range of ways. Note: 1 barclays.co.uk/money-management/ 2 The #1 for digital users score is from Curinos - eBenchmarkers Analyser and internal analysis. and is from their April 2023 report . * In Barclays UK, the Performance Framework through its design and approach encapsulates the Consumer Duty and looks to mitigate the risk of inappropriate practices. It provides guidance on Performance Management to promote the right culture to deliver good customer outcomes, supports colleague development and drives sustainable commercial performance. Fraud and scams A key way we support the financial resilience of vulnerable customers is through our focus on fraud and scams. While overall rates of fraud and scams continue to rise across the sector, Barclays has one of the lowest scam rates and highest reimbursement rates in the industry, due to our investment in robust security systems and commitment to educating customers¹. Our fraud detection systems can determine in less than a second if a payment is likely to be a fraudster rather than a customer, and we continue to invest in security features that protect against fraud and scams – including ‘App ID’, which allows customers to verify they are speaking to a Barclays colleague. We are also part of the ‘Do not originate’ scheme, a partnership with the telecommunications industry, UK Finance and Ofcom to prevent customer phone numbers from being spoofed. Fraud can only be stopped through cross- sector collaboration. Barclays is a founding member of Stop Scams UK, a group made up of banks, telecoms and tech firms. Note: 1 PSR report, October 2023, .psr.org.uk/information-for- consumers/app-fraud-performance-data/ + You can found out more about Barclays’ policy views here: home.barclays/news/press-releases/2023/08/eight- in-ten-brits-feel-unsafe-on-social-media-due-to- scammers/ Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 26 Consumer, cards and payments US customer digital engagement* Corporate and Investment Bank revenue ranks and market shares Customers and clients (continued) Customers and clients – our KPIs Barclays UK Net Promoter Score (NPS) 2023 2022 2021 Barclays UK complaints excluding PPI (% movement year on year) (%) 2023 2022 2021 About this KPI and why we use it Net Promoter Score (NPS) is used to measure the strength of customer relationships. We track NPS to identify both our strengths and where there is room for improvement, informing how we develop our services and products in the future. About this KPI and why we use it About this KPI and why we use it The FCA publishes complaints information every six months – a good measure of how well UK institutions are driving customer outcomes. We measure our volume of complaints, tracking against goals and reviewing root causes to inform changes to our products and services. Digital engagement assesses our digital value proposition and user experience. We measure usage over a 90-day period as a percentage of total active customers, reflecting the general health of the digital experience and allowing us to uncover any issues we may need to address. 2023 2022 2021 (%, #) 2023 2022 2021 #6 #6 #6 #6 #6 #6 n Global Markets revenue ranking and share n Dealogic Investment Banking global fee ranking and share demonstrating our performance vs peers. About this KPI and why we use it Revenue ranks and market shares are a good indicator to monitor success and identify opportunities. By using Dealogic Investment Banking global fee ranking and share, and a comparison to global peers' share of reported revenues for Global Markets, we can assess our relative performance versus a 1 clearly and transparently. defined peer group How we performed How we performed How we performed How we performed NPS for Barclays UK has improved through 2023 to +17. Personal Customers with Blue or Premier accounts feel more positive about their experience, although a decline in Business Banking NPS means rebuilding and deepening relationships with clients is high on our forward agenda. Barclaycard NPS has also increased through 2023. We are striving for highly satisfied customers and recognise that better service is a key lever. However, complaint volumes increased during 2023, driven by specific issues encountered by customers and rising levels of fraud and scams experienced across industry. A rigorous plan is in place to address these issues and to reduce the reasons for customers to complain, including a focus on improving our propositions and execution to deliver best-in-class service. Overall, our customer digital engagement improved year-on-year by 190bps, excluding Gap Inc. customers who display lower digital activity. The improvement reflects the introduction of new and enhanced digital engagement features and technology advancements. In 2023 we maintained our rank of sixth across the Investment Bank in both Global Markets and Investment Banking, despite challenging market conditions and suppressed dealmaking. See page 191 for details on Executive Director remuneration linked to these KPIs + Note: * Excluding Gap Inc. customers. Note: 1 Global Markets rank based on Barclays' calculations using Peer reported financials. Top 10 peer group includes Barclays and US peers: BoA, BNP, CITI, CS, DB, GS, JPM, MS and UBS. Where any of the peer group has not published results by the time we report, we use the consensus estimate for their quarterly performance. 17111129918-17-1776.074.171.86.53.17.33.12.76.96.43.63.66.4Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 27 Colleagues Colleagues Our colleagues are connected by a shared Purpose, Values and Mindset, and commitment to delivering to a consistently excellent standard. We strive to make Barclays a great place to work, empower colleagues to attain sustainable high performance and deliver strong results for stakeholders Where to find out more: + For more information on our commitment to building a diverse, equitable and inclusive workplace, see: home.barclays/who-we- are/our-strategy/diversity-and-inclusion/ For additional colleague KPIs please visit our ESG resource hub: home.barclays/sustainability/esg-resource-hub/reporting and disclosures/ Engaging with colleagues Barclays has a diverse talent pool of around 90,000 colleagues across the world. We engage in regular dialogue with our colleagues to understand what is working well and where there are opportunities to improve. This includes townhalls, skip-level meetings, site visits, leader- led engagement and surveys. We maintain an engagement approach in line with the UK's Financial Reporting Council (FRC) governance recommendations. Our regular all-colleague Your View surveys give individuals the opportunity to share their views on how they find working at Barclays. This year’s survey generally shows improvement to our scores: Engagement increased +2ppt to 86%, alongside our highest scores to date for Wellbeing (88%) and Inclusion (83%). In addition, our broader Continuous Listening Strategy includes pulse surveys deployed throughout the employee lifecycle, capturing insights that help us improve the colleague experience. Maintaining a strong and effective partnership 1 , national works councils and the with Unite Barclays Group European Forum helps us gather feedback. We continue to consult with colleague representatives on major change programmes impacting our people, to minimise compulsory job losses and focus on reskilling and redeployment. Achieving a consistently excellent standard As our CEO discusses in his letter, Barclays continues to focus on delivering to a higher operating standard via our Group-wide cultural change programme, Consistently Excellent. This programme challenges colleagues to address five key areas – Precision, Service, Focus, Efficiency and Diversity of thought – to establish a new operating standard. This higher standard is becoming part of our culture and we are working hard to equip everyone with the right skills to achieve this, while rewarding progress. We have incorporated it into our existing Values and Mindset behaviours and as part of an enhanced set of leadership behaviours. We also began updating our key processes for attracting, retaining and developing talent, planning for succession, and recognising and rewarding performance. To help create a common understanding across the Group, we led Consistently Excellent workshops throughout 2023 for our senior leaders. In 2024, all colleagues will be invited to attend these workshops. Progress in embedding this new operating standard with colleagues is reflected in the results from our Autumn 2023 Your View survey. 89% of colleagues felt their peers “have a good understanding of what it means to be a consistently excellent organisation”. Further, 62% (+2ppt) of colleagues said it was “simple and straightforward to get things done at Barclays”, a concept in line with one of our key Consistently Excellent focus areas, although this result shows there is still more to be done in making Barclays more efficient. Investing in our talent Our talent ambition underpins Barclays’ approach to talent attraction, retention and development. We relaunched our ambition in 2023 to focus on the skills and capabilities we require for the future, and set the benchmark for what it means to lead at Barclays through our refreshed leadership framework. Together, these set clear behavioural expectations for our leaders, and enable our leaders to create the right culture for colleagues to deliver to a consistently excellent standard. Using this framework we aim to empower Barclays leaders to create an environment of psychological safety and inclusion, and to foster a culture of learning and curiosity where colleagues can thrive – supporting all colleagues across Barclays to grow and progress their careers. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 28 Colleagues (continued) To empower our colleagues to attain sustainable high performance, we continued to deliver our flagship leadership development programmes: the Enterprise Leaders’ Summit, our Strategic Leaders Programme, and our award-winning Aspire programme. With our Diversity, Equity and Inclusion (DEI) agenda in mind, we continue to attract candidates who possess the capabilities, critical skills and experience required to provide exceptional service to our customers and clients. In 2023, our graduate intake was over 36% female, while our undergraduate Discovery Diversity Programme focused on showcasing successful career paths for underrepresented minorities. These hiring programmes have helped drive applications from a diverse pool of candidates. To further promote social mobility, we will continue our extensive apprentice hiring programme through engagement with educational institutions. Delivering on our Diversity, Equity and Inclusion plans and ambitions At the end of 2023, 5.1% of UK and 21% of US colleagues were from underrepresented ethnicities, surpassing our ambitions two years early. We are now resetting this ambition to achieve a further 12.5% and 5% respective increase in the UK and the US by the end of 2025. To hold ourselves accountable at a senior level we have set a new ambition to increase the number of Managing Directors from underrepresented ethnicities by 50% – to 84 in the UK and US combined by the end of 2025. At the end of 2023 this was 55. We are also progressing towards our ambition of 33% representation of women in senior leadership roles (Managing Directors and Directors) by the end of 2025. At the end of 2023 Δ . this was 30% Maintaining our focus on wellbeing In our Autumn 2023 Your View survey the Wellbeing Index score rose to 88% favourable (+2ppt year on year), demonstrating our maintained focus on wellbeing. We remain committed to supporting colleague wellbeing using data-driven insights and engagement through leader-led initiatives such as the 'Healthy to Talk' campaign on World Mental Health Day. This is supplemented by dedicated people leader workshops exploring practical ways to continue to embed wellbeing into ways of working. There are now over 47,500 colleagues registered on our Be Well wellbeing portal – the highest number since its launch – while our mental health awareness eLearning has been completed by 84% of colleagues and 90% of people leaders. Introducing structured hybrid working Following our continuous test and learn approach, Barclays has adapted its ways of working to introduce structured hybrid working – supporting colleagues to connect in-person and plan their work to make the most of both their time in the office and remotely. Building connections is a vital part of our culture. In our Autumn 2023 Your View survey, 76% of colleagues told us that their team’s hybrid approach enables them to deliver the best outcomes for our colleagues, clients and customers. We continue to monitor colleague perceptions and may evolve our hybrid working approach further as we gather insights and learnings. Our people policies 2 Our people policies help us recruit the best people, provide equal opportunities and create an inclusive culture in line with our Purpose, Values and Mindset, and in support of our long- term success. They are regularly reviewed and updated to ensure alignment with our broader people strategy. A great place to work We were delighted to receive a number of awards in 2023 in recognition of our efforts, including: • Times Graduate Employer of Choice Award – Finance category • LinkedIn Top UK Employer – for the third consecutive year • Times Top 100 Graduate Employers – Top 10 We are committed to paying our colleagues fairly and appropriately relative to their role, skills, experience and performance. This means our remuneration policies reward performance in line with our Purpose, Values and Mindset, and our consistently excellent standard. We also encourage our colleagues to benefit from Barclays’ performance by enrolling in our employee share ownership plans. Companies Act Diversity Disclosure 3 On a Companies Act 2006 414C basis as at 31 December 2023, Barclays employs 98,662 colleagues across the world (54,032 male, 44,219 female, and 411 undisclosed), including 423 senior managers (318 male, 105 female), and 13 Board of Directors at Barclays PLC (8 male, 5 female). + Read more about our commitment to fair pay in the Remuneration report, from page 191, and in our Fair Pay Report. Notes: 1 The collective bargaining coverage of Unite in the UK represents 80% (2022: 82%) of our UK workforce and 40% (2022: 43%) of our global workforce. 2 Our policies reflect relevant employment law, including the provisions of the Universal Declaration of Human Rights and the International Labour Organization (ILO) Declaration on Fundamental Principles and Rights at Work. 3 Headcount basis, including colleagues on long-term leave. Undisclosed refers to colleagues who do not record their gender in our systems. 'Senior managers' is defined by the Companies Act and is different to both our Senior Managers under the FCA and PRA Senior Managers regime, and a narrower scope than our Director and Managing Director corporate grades. It includes Barclays PLC Group Executive Committee members, their direct reports and directors on the boards of undertakings of the Group, but excludes Directors on the Board of Barclays PLC. Where such persons hold multiple directorships across the Group they are only counted once. Δ 2023 data re-produced from the Barclays PLC Annual Report where selected ESG metrics marked with the symbol △ were subject to KPMG Independent Limited Assurance under ISAE (UK) 3000 and ISAE 3410. Refer to the ESG Resource Hub for further details. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 29 Colleagues (continued) Colleagues – our KPIs Colleague engagement (%) 2023 2022 2021 Females at Managing Director and Director level (%) 33% by end 2025 “I would recommend Barclays to people I know as a great place to work” (%) “I believe that my team and I do a good job of role modelling the Values every day” (%) 2023 2022 2021 2023 2022 2021 2023 2022 2021 About this KPI and why we use it About this KPI and why we use it Colleague engagement is derived from the responses to three questions in our all- colleague Your View survey that measure colleague advocacy, motivation and sense of personal accomplishment. It enables us to monitor how engaged our workforce is and closely relates to key organisational and colleague outcomes such as productivity, wellbeing and retention. This metric is used to monitor our progress against our gender ambition of 33% females at Managing Director and Director level by the end of 2025. How we performed How we performed Colleague engagement improved +2ppt to 86% and we saw improvements across all three of the questions that make up the engagement score. We saw a marginal improvement since 2022. While we are making gradual long-term progress to achieve our ambition of 33% by the end of 2025, we still have more to do. About this KPI and why we use it This is one of the three questions making up our colleague engagement score, specifically measuring advocacy of Barclays as an employer. In addition to being used as part of our engagement score, this question can also be used as an 'Employee Net Promoter Score' and is regularly tracked in our monthly pulse survey. How we performed Colleague advocacy improved slightly year on year and is +13ppt above our pre-pandemic score of 73% in 2019 – and +5ppt above our external benchmark. About this KPI and why we use it This question within our Your View survey measures colleagues’ perception of how well the Barclays Values are role-modelled by colleagues. The Values are our moral compass; the fundamentals of who we are and what we believe is right. How we performed In 2023 we saw a +2ppt improvement year on year, which brings us in line with the previous high of 94% in 2020. See page 191 for details on Executive Director remuneration linked to these KPIs + Note Δ 2023 data subject to independent Limited Assurance under ISAE (UK) 3000 and ISAE 3410. Current limited assurance scope and opinions can be found within the ESG Resource Hub: home.barclays/sustainability/esg-resource-hub/reporting and disclosures/ 86848230△2928868582949292Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 30 Society Society Our success is judged not only by our commercial performance but also by our contribution to society and the way we work together for a better financial future for all our stakeholders. Our focus on society falls broadly into three categories: Climate, Communities and Suppliers. Where to find out more: + About the people and businesses Barclays supports through its community programmes: home.barclays/community About the Bank’s skills and employability programmes at home.barclays/lifeskills Barclays’ climate and ESG-related data, targets and progress can be found in the Barclays Climate and Sustainability report from page 59. and within the ESG (non-financial) Data Centre within our ESG Resource hub: home.barclays/sustainability/esg- resource-hub/reporting-and-disclosures/ Our policies are a lever for reducing our financed emissions. In 2024, we updated our Climate 1 : Change Statement, to include • No project finance, or other direct finance to energy companies, for upstream oil and gas expansion projects or related infrastructure. • Restrictions for new energy company clients engaged in expansion from January 2025. • Restrictions on non-diversified energy companies engaged in long lead expansion. • Additional restrictions on unconventional oil and gas, including Amazon and extra heavy oil. • Requirements for energy companies to have 2030 methane reduction targets, a commitment to end all routine / non-essential venting and flaring by 2030 and near-term net zero aligned Scope 1 and 2 targets from January 2026. • Expectations for energy companies to produce relevant information in relation to their transition plans or decarbonisation strategies by January 2025. Climate Barclays is committed to achieving its ambition to be a net zero bank by 2050. We are focused on reducing our financed emissions through our policies, targets and financing. This includes working with our clients as they decarbonise and supporting their efforts to transition the real economy in a manner that is just, orderly and provides energy security. We have now set 2030 reduction targets for eight of the highest-emitting sectors in our portfolio: Energy, Power, Cement, Steel, Automotive manufacturing, Aviation, Agriculture and Commercial Real Estate; and assessed the baseline and convergence point for our UK Housing portfolio. This meets our commitment under the Net Zero Banking Alliance (NZBA) to set targets for material high-emitting sectors in our portfolio. Note: 1 For details on the scope and application of the updated positions please refer to the Climate Change Statement found: home.barclays/ sustainability/esg-resource-hub/statements-and-policy-positions/ Moray West offshore wind farm In 2023 Barclays provided approximately £100 million in loans and CPI, IRS & FX hedging to support Moray West offshore wind farm, developed by Ocean Winds. Once constructed, the project is expected to provide a secure, reliable source of energy to supply the equivalent of 50% of Scotland’s domestic electricity – the same as the power needs of up to 1.33 million homes. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 31 Society (continued) We understand that capital is critical for a successful energy transition and are focusing our financing to those clients actively engaged in the energy transition. The scale of our business gives us the opportunity to help finance the energy transition – to use our global reach, products, expertise and position in the global economy to work with our clients, including those in the energy sector, as they transition to a low-carbon business model. + Please see the full Climate Change Statement at: home.barclays/sustainability/esg-resource-hub/ statements-and-policy-positions/ In 2024, we also published the Barclays Transition Finance Framework, outlining the criteria for transactions to be included towards Barclays’ target to facilitate $1trn of Sustainable and Transition Finance between 2023 and 2030. In 2023, we financed $67.8bn of Sustainable and Transition Finance, demonstrating good momentum towards our target of $1trn by the end of 2030. + Please see page 70 of the Climate and Sustainability report for further detail on our Transition Finance Framework. In addition, Barclays’ Sustainable Impact Capital portfolio has a mandate to invest up to £500m of the Bank’s own capital in sustainability-focused start-ups by 2027, helping accelerate the transition towards a low-carbon economy. To date, 21 investments have been made, deploying over £138m since 2020. Following investment, companies are offered access to the Bank’s wider ecosystem of support – including space at Rise, Barclays’ FinTech hubs, where cutting-edge start-ups and scale-ups can connect, create and scale their businesses. Communities Barclays is committed to building a stronger, more inclusive economy that is better for everyone. We are supporting local communities where we operate by enabling people to develop the skills and confidence they need to succeed, and helping businesses to grow and create jobs. We regularly engage with our community partners to help shape our strategy and deepen our understanding of evolving societal issues. We request formal quantitative and qualitative information from our charity partners on a quarterly basis and regularly seek feedback from the CEOs we support through our Unreasonable Impact programme - a partnership between Barclays and Unreasonable Group, detailed further on the following page. Feedback and data from our community partners, charity partners and the businesses we support helps inform and evolve our programmes to ensure they best meet their needs. Skills and employability We believe everyone deserves the financial independence, security and opportunity that comes with a job – and a vibrant, skilled workforce ensures local communities and businesses can thrive. In 2023 our programmes reached more than 3.27 million people around the world, unlocking the skills and employment opportunities people need to progress. Barclays' LifeSkills programme has been delivering a positive impact in UK communities for a decade, helping millions of people develop the vital employability and financial skills they need to succeed at work, thrive in the digital age and better manage their money. Through the next chapter of our LifeSkills programme, Barclays has committed to upskilling 8.7 million people and placing 250,000 people into work by the end of 2027. In addition, Barclays’ Military and Veterans Outreach programme provides support to service personnel, veterans and their families to develop the skills they need to transition to civilian life, build careers beyond the military and grow their own businesses. Our Digital Eagles programme, which upskilled more than 622,000 people in 2023, is enabling people to become more confident with technology and stay safe online. LifeSkills in the UK Barclays is proud of the positive impact LifeSkills has made over the past 10 years. With social inequalities continuing to rise, there is more to do to support underserved communities – which is why we are putting socio-economic inclusion at the heart of the LifeSkills programme to give more help to people who would otherwise be left behind. The focus of new investment is for people in the UK’s most underserved communities and underrepresented groups. We are working in partnership with respected charities, the education sector, the business community and Barclays' colleagues to support families, young people and young adults to thrive – now and in the future. Find out more here: home.barclays/lifeskills + Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 32 Society (continued) We also recognise the power of sport to engage and strengthen communities. The Barclays Community Football Fund has helped more than 2,900 community sports groups make football more accessible to underrepresented groups, reaching more than 400,000 young people. In 2023, as Official Banking Partner of The Championships, Wimbledon, Barclays made the largest ever partner donation to the Wimbledon 1 Foundation and connected Barclays LifeSkills to the UK Set for Success programme and the Barclays Net Work programme in the US. Using sport, and through mentoring sessions with inspirational athletes, both initiatives provide young people from underserved communities the opportunity to develop valuable life skills. The UK Set for Success programme aims to support 3,900 people in 30 regions across the UK over the next four years. Sustainable growth Businesses are the engines of growth and innovation in communities around the world, pioneering solutions to support the transition to a more sustainable, inclusive and just future. Barclays is well-positioned with the capabilities, resources and networks to support the growth of these businesses at each stage of the lifecycle - from idea to IPO - with a dynamic package of innovative programming, workspaces and investment. In 2023, more than 5,600 businesses were supported through our programmes³. Through our Unreasonable Impact programme, we support high-growth entrepreneurs around the world with the network, resources and mentorship to address global issues and scale their businesses. In 2023, Barclays committed to support an additional 200 ventures through the programme by the end of 2027. More than 300 ventures have been supported so far, collectively raising over $11bn in financing and employing more than 25,000 people. Through Eagle Labs, we are also helping entrepreneurs in UK communities who are just starting out – giving them access to mentors, office space and a collaborative community. Charitable giving and investment in our communities Barclays supports employees to make a positive difference to the causes that matter most to them. In 2023, we supported more than 4,800 colleagues around the world to fundraise and donate to their chosen charities - with a total of Female Founder Accelerator In 2023, through Barclays’ Eagle Labs, we launched our first Female Founder Accelerator, in partnership with AccelerateHER — supporting 40 female-led technology businesses to address the gender imbalance in the entrepreneur community. In 2024, the Female Founder Accelerator is funded by the UK Government and will support a further 100 businesses. During the nine-week programme, founders work with experts from across the entrepreneurial landscape in a series of masterclasses, with the focus on developing their business propositions further. + For further information please see here: labs.uk.barclays/ what-we-offer/our-programmes/ female-founder-accelerator/ £7.6m, including matching, given to more than 1,700 charities. We also supported 10,360 colleagues to donate £2m in total, with matching, via our UK Payroll Giving programme. Barclays supports communities directly by investing money and skills in partnerships with respected non-governmental organisations, charities and social enterprises. Our investment amounted to £49.3m in 2023 including charitable giving, management costs and monetised work hours of Barclays' colleagues. Suppliers As a global institution, we have responsibility for a large supply chain. We engage directly with our Suppliers - our Third Party Service Providers (TPSPs) - to promote Diversity, Equity and Inclusion and we are committed to trying to identify and seeking to address the modern slavery risks in our supply chain. We work closely with our TPSPs and set out our expectations in our Third Party Service Provider Code of Conduct (TPSP CoC). The TPSP CoC encourages our TPSPs to adopt our approach to doing business and details our expectations for matters including environmental management, human rights, diversity and inclusion and also for living the Barclays Values. + home.barclays/who-we-are/our-suppliers/our-requirements- of-external-suppliers/ Please see here for further information: We aim to pay our TPSPs within clearly defined terms and achieved 93% on-time payment to our suppliers at the end of 2023 (93% at the end of 2022), exceeding our public commitment of 85%². Barclays is also proud to be a signatory of the Prompt Payment Code in the UK. Note: 1 wimbledon.com/en_GB/news/articles/2022-11-22/ barclays_announced_as_official_banking_partner_of_the_cham pionships_wimbledon_from_2023.html 2 We measure prompt payment globally by calculating the percentage of TPSP spend paid within 45 days following invoice date. This measurement applies against all invoices by value over a three month average period. 3 5,633 businesses were supported. Wimbledon In 2023 Barclays launched a multi-year partnership with the All England Lawn Tennis Club as the Official Banking Partner of Wimbledon. In our first year, to accompany our partnership, we delivered an international campaign bringing in our customers, clients, colleagues and communities. • Customers benefited from perks and elevated Premier giveaways. • We showcased two of our Unreasonable Impact businesses. 80 Acres Farms, a company also supported by Barclays Sustainable Impact Capital, built a one-of- a-kind vertical strawberry farm on site, while CLUBZERØ supported us with returnable packaging. Over 6,000 Wimbledon attendees interacted with these two businesses over the course of The Championships, providing unique exposure. • Additionally, we delivered for our communities with the Wimbledon Foundation by leveraging Barclays LifeSkills to expand the UK Set for Success programme, and launched the Barclays Net Work employability programme in the US'. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 33 Society (continued) Society - our KPIs Operational GHG emissions (market-based) (tonnes CO2e) Social, environmental and sustainability-linked financing facilitated ($bn) Skills and employability: Number of people upskilled (millions) Sustainable growth: Number of businesses supported (thousands) 2023 2022 2021 About this KPI and why we use it Barclays is working to achieve net zero operations, consistent with a 1.5°C aligned pathway, and counterbalance any residual emissions. This metric measures total gross Scope 1 and 2 (market-based) emissions generated from Barclays’ branches, offices and data centres, including all indirect emissions from electricity consumption. How we performed We continued to source 100%Δ renewable electricity for our global real estate portfolio and continued to meet our 90% Scope 1 and 2 market-based emissions reduction target – reducing these Δ . emissions by 93% See page 191 for details on Executive Director remuneration linked to these KPIs + Note 2023 2022 2023 2023 About this KPI and why we use it In 2022, we set a target of $1trn Sustainable and Transition Financing between 2023 and 2030 – encompassing green, social, transition and sustainability-linked financing, having met our previous target to facilitate £150bn of social, environmental and sustainability linked financing by 2025. Please see page 101 for further detail on our target. + How we performed In the first full year of our new $1trn target by 2030, we have Δ facilitated $67.8bn , demonstrating good momentum. About this KPI and why we use it Barclays is delivering skills and employment opportunities for people in the communities where we operate. The total number of people supported to unlock skills and employment opportunities includes those upskilled through our LifeSkills, Digital Eagles and Military and Veterans Outreach programmes. About this KPI and why we use it Barclays is championing innovation and sustainable growth through programmes that unlock the world of finance, enabling businesses and economies to grow. The total number of businesses supported in our communities includes those engaged through Barclays’ Eagle Labs, Rise, Sustainable Impact Capital and Unreasonable Impact. How we performed How we performed This KPI is new for 2023. In 2023, our impact measurement and reporting evolved to demonstrate Barclays’ holistic impact in communities. See the ‘Society' section on pages 31-32 for more information. This KPI is new for 2023. In 2023, our impact measurement and reporting evolved to demonstrate Barclays’ holistic impact in communities, through Barclays LifeSkills, Digital Eagles and Military and Veterans Outreach. In previous years, Barclays reported the number of people upskilled solely through LifeSkills, which for Δ 2023 is 2.6m (2022: 2.7m). From 2023, new investment through LifeSkills is focused on targeted support for people in underserved communities, resulting in a smaller number of people reached overall through our programme. Our current estimate of our financed emissions based on our disclosed BlueTrackTM methodology Portfolio Energy Power Cement Metals (Steel) Automotive manufacturing UK Housing UK Commercial real estate Agriculture Aviation December 2023 42.5Δ MtCO2e (absolute emissions) 241Δ KgCO2e/MWh (physical intensity) 0.573Δ tCO2e/t (physical intensity) 1.635Δ tCO2e/t (physical intensity) 175.2Δ gCO2e/km (physical intensity) 2 32.1Δ kgCO2e/m (physical intensity) 2 30.0Δ kgCO2e m (physical intensity) 2.4Δ MtCO2e (absolute emissions) 882Δ gCO2e/RTK (physical intensity) Cumulative performance vs. baseline -44 % -26 % -8 % -16 % 0 % N/A N/A N/A N/A Date baseline set: n December 2020 n December 2021 n December 2022 n December 2023 About this KPI and why we use it We continue to assess the financed emissions across our portfolio and measure the baseline emissions we finance across sectors. Our assessment will inform our plan for target setting in the coming years and support our better understanding of the extent to which our financing aligns with a 'well below 2°C' pathway. How we performed TM During 2023 we added further sectors to our BlueTrack methodology, progressing towards our NZBA commitment to set science-based targets for all material high- emitting sectors (as defined by the NZBA) in our portfolio by April 2024. Our detailed analysis of our sectors and performance is contained within the Climate & Sustainability section from page 80. Δ 2023 data subject to independent limited assurance under ISAE (UK) 3000 and ISAE 3410. Current limited assurance scope and opinions can be found within the ESG Resource Hub: home.barclays/sustainability/esg-resource-hub/reporting-and-disclosures/ 16,89522,14134,68867.8△65.33.275.63 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 34 Investors Investors Our investor stakeholder group encompasses investors, rating agencies and other market participants with an interest in the financial performance of the Group. Where to find out more: Further details can be found at: home.barclays/investor-relations/ + Engaging with investors Through the year we maintained active engagement with our stakeholders across a number of themes, including capital strategy and allocation, divisional performance and the impact of the changing macroeconomic environment. This bilateral engagement has helped inform our Investor Update and our plans to deliver further value to our shareholders and stakeholders. The combination of our 2023 Results Announcement, Resegmentation document, and the Investor Update in February 2024 provide further detail on our three-year plan to deliver higher returns, our capital allocation priorities and revised financial targets, as well as the updated divisional structure we will report upon from Q1 2024. We also engaged extensively regarding our climate strategy, methodology, and the actions we have taken to build a sustainable bank. Alongside this, our engagement also covered how we have utilised the Board and senior management to engage with other corporates on governance and the control environment. Shareholder feedback on ESG demonstrated a focus on the development of our climate strategy and policies. In February 2024, we updated our Climate Change Statement, including our policies, targets and financing to reduce financed emissions. Our 2024 AGM will be hosted in Glasgow to continue our wider engagement with shareholders. Performance during the year Barclays delivered a Group statutory RoTE of 9.0% (2022: 10.4%) with profit before tax of £6.6bn (2022: £7.0bn), which included £0.9bn of structural costs actions in Q423. The prior year included the impact of the Over-issuance of Securities. The following performance highlights exclude the impact of the Q423 structural cost actions and the impact of the Over-issuance of 1 . Securities in the prior year Group RoTE of 10.6% (2022: 11.6%) with profit before tax of £7.5bn (2022: £7.7bn) Group income of £25.4bn, up 3% year-on-year: Barclays UK income increased 5% to £7.6bn, driven by net interest income growth from higher rates, including higher structural hedge income. Corporate and Investment Bank (CIB) income decreased 4% to £12.6bn, driven by lower client activity in both Global Markets and Investment Banking, partially offset by a strong performance in Corporate driven by Transaction Banking. Consumer Cards and Payments (CC&P) income increased 18% to £5.3bn reflecting higher balances in US cards and favourability from higher rates and client balance growth in Private Bank. Group total operating expenses were £16.0bn, up 2% year-on-year. Cost: income ratio of 63%as the Group delivered positive cost: income jaws of 1%. Credit impairment charges were £1.9bn (2022: £1.2bn) with an LLR of 46bps (2022: 30bps). CET1 ratio of 13.8% (2022: 13.9%), with risk weighted assets (RWAs) of £342.7bn (December 2022: £336.5bn) and tangible net asset value per share of 331p (December 2022: 295p). Capital distributions: Total capital distributions of £3.0bn announced in relation to 2023, up c.37% on 2022, reflecting a total dividend of 8.0p and total share buybacks of £1.75bn for 2023. This includes our intention to initiate a further share buyback of up to £1.0bn. Note: 1 Page 391 includes a reconciliation of financial results excluding the impact of Q423 structural costs actions and the Over- issuance of Securities in 2022. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Investors (continued) Consolidated summary income statement For the year ended 31 December Net interest income Net fee, commission and other income Total income Operating costs UK bank levy Litigation and conduct Total operating expenses Other net income Profit before impairment Credit impairment (charges)/releases Profit before tax Tax charge Profit after tax Non-controlling interests Other equity instrument holders Attributable profit Selected financial statistics Basic earnings per share Diluted earnings per share Return on average tangible shareholders’ equity Cost: income ratio 2023 £m 12,709 12,669 25,378 (16,714) (180) (37) (16,931) (9) 8,438 (1,881) 6,557 (1,234) 5,323 (64) (985) 4,274 27.7p 26.9p 9.0% 67% 2022 £m 10,572 14,384 24,956 (14,957) (176) (1,597) (16,730) 6 8,232 (1,220) 7,012 (1,039) 5,973 (45) (905) 5,023 30.8p 29.8p 10.4% 67% Consolidated summary balance sheet As at 31 December Assets Cash and balances at central banks Cash collateral and settlement balances Loans and advances at amortised cost Reverse repurchase agreements and other similar secured lending Trading portfolio assets Financial assets at fair value through the income statement Derivative financial instruments Financial assets at fair value through other comprehensive income Other assets Total assets Liabilities Deposits at amortised cost Cash collateral and settlement balances Repurchase agreements and other similar secured borrowings Debt securities in issue Subordinated liabilities Trading portfolio liabilities Financial liabilities designated at fair value Derivative financial instruments Other liabilities Total liabilities Equity Called up share capital and share premium Other equity instruments Other reserves Retained earnings Total equity excluding non-controlling interests Non-controlling interests Total equity Total liabilities and equity Net asset value per ordinary share Tangible net asset value per share Number of ordinary shares of Barclays PLC (in millions) Year-end USD exchange rate Year-end EUR exchange rate Barclays PLC Annual Report 2023 35 2023 £m 2022 £m 224,634 108,889 399,496 2,594 174,605 206,651 256,836 71,836 31,946 1,477,487 538,789 94,084 41,601 96,825 10,494 58,669 297,539 250,044 17,578 1,405,623 4,288 13,259 (77) 53,734 71,204 660 71,864 1,477,487 382p 331p 15,155 1.28 1.15 256,351 112,597 398,779 776 133,813 213,568 302,380 65,062 30,373 1,513,699 545,782 96,927 27,052 112,881 11,423 72,924 271,637 289,620 16,193 1,444,439 4,373 13,284 (2,192) 52,827 68,292 968 69,260 1,513,699 347p 295p 15,871 1.20 1.13 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 36 Investors (continued) Investors – our KPIs Common Equity Tier 1 (CET1) ratio1 (%) Group return on tangible equity (RoTE)1 (%) Total operating expenses1, 2 (£bn) Cost: income ratio1 (%) Target range 13-14% Target greater than 10% Below 60% 2023 2022 2021 2023 2022 2021 2023 2022 2021 2023 2022 2021 About this KPI and why we use it About this KPI and why we use it About this KPI and why we use it About this KPI and why we use it CET1 ratio is a measure of the capital strength and resilience of Barclays, determined in accordance with regulatory requirements. The Group's capital management objective is to maximise shareholder value by prudently managing the level and mix of its capital. This is to ensure the Group is appropriately capitalised relative to the minimum regulatory and stressed capital requirements, and to support the Group's risk appetite, growth, and strategy whilst seeking to maintain a robust credit proposition for the Group. The ratio expresses the Group's CET1 capital as a percentage of its RWAs. RWAs are a measure of the Group's assets adjusted for their respective associated risks. RoTE measures our ability to generate returns for shareholders. It is calculated as profit after tax attributable to ordinary shareholders as a proportion of average shareholders’ equity excluding non- controlling interests and other equity instruments adjusted for the deduction of intangible assets and goodwill. This measure indicates the return generated by the management of the business based on shareholders’ tangible equity. Achieving a target RoTE demonstrates the organisation’s ability to execute its strategy and to align management’s interests with those of its shareholders. RoTE lies at the heart of the Group’s capital allocation and performance management process. How we performed How we performed The CET1 ratio decreased to 13.8% (December 2022: 13.9%), within our target range, as RWAs increased by £6.2bn to £342.7bn partially offset by an increase in CET1 capital of £0.4bn to £47.3bn. Statutory RoTE was 9.0% (2022: 10.4%) including £0.9bn of structural cost actions in Q423. Excluding Q423 structural cost actions, RoTE 3 . was 10.6% See page 191 for details on Executive Director remuneration linked to these KPIs + Notes We view total operating expenses as a key strategic area for banks. Those that actively manage costs and control them effectively will gain a strong competitive advantage. The cost: income ratio measures total operating expenses as a percentage of total income and is used to assess the productivity of our business operations. How we performed Group operating expenses increased to £16.9bn (2022: £16.7bn) reflecting £0.9bn of structural cost actions in Q423, business growth and investments in resilience and controls, partially offset by lower litigation and conduct charges. The prior year included £1.0bn of litigation and conduct charges related to the Over- issuance of Securities. How we performed The Group cost: income ratio was 67% (2022: 67%). Excluding Q423 structural cost 2 actions, Group cost: income ratio was 63% as the Group delivered positive jaws of 1%. 1 KPIs reflect the targets and ambitions followed during 2023. On 20 February 2024, the 2023 Results Announcement set out refreshed targets and ambitions which future progress will be measured against. Please see page 13 for further detail, or home.barclays/strategy 2 Litigation and conduct in 2023: £37m, 2022: £1,597m, which includes £966m related to the Over-issuance of Securities and 2021: £397m. 3 Page 391 includes a reconciliation of financial results excluding the impact of Q423 structural costs actions and the Over-issuance of Securities in 2022. 13.813.915.19.010.413.12.79.916.916.714.7676767 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 37 Additional disclosure In this section we disclose information as required by Companies Act 2006 and various other information to help navigate the Annual Report 2023. Section 172 statement Non-financial and sustainability information Statement TCFD compliance ESG ratings and reporting Managing risk Viability statement Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Section 172(1) statement Barclays PLC Annual Report 2023 38 How the Board has regard to the views of our stakeholders You can read more about our key stakeholder groups and how we listen and respond to them, striving to create sustainable value for all those we serve in Our Stakeholders from page 23. You can also read about the key activities of the Board and decisions taken during the year, along with details of the Board’s engagement with colleagues in Key Board Activities in 2023 in the Board Governance report. Overview Throughout the year, the Board and individual Directors engage directly and indirectly with stakeholders to ensure they have a deep understanding of the impact of the Group’s operations on key stakeholders, as well as their interests and views. This includes meeting with customers and clients, colleagues, investors, proxy advisers, key regulators, NGOs and other stakeholders. This engagement, both directly and through reporting by executive management, to whom the day-to-day operations of the business are delegated, seeks to ensure the Board understands the key issues to enable the Directors to comply with their legal duty under Section 172(1). You can find out more about how the Directors have had regard to the matters set out in Section 172(1) when discharging their duties, and the effect of those considerations in reaching certain decisions below. Embedding a standard of consistent excellence across Barclays As reported in our 2022 Annual Report, towards the end of 2022, Barclays established a group- wide cultural change programme led by our Group Chief Executive, to set a standard of consistent excellence, recognising that both our stakeholders and management want Barclays to perform at a consistently very high level, each and every day. This programme challenges colleagues to address five key areas – service, precision, focus, simplicity and diversity of thought – to establish a new operating standard. This programme is supported by our existing Purpose, Values and Mindset. The Board recognises that this cultural change programme is key to driving better outcomes for Barclays' stakeholders, including for our investors, customers, clients and colleagues. As such, oversight of this programme has been a key area of focus for the Board in 2023. In 2023, the Board received updates on the progress of this programme at each Board meeting, including the key levers necessary to achieve the required outcomes. Board members have discussed with management the importance of ‘tone from the top’, recognising the need for senior leadership accountability and support in order to drive a broader cultural shift across the wider colleague base. In accordance with the Companies Act 2006 (the Act), this statement sets out how the Directors have had regard to the matters set out in Section 172(1) of the Act when performing their duty to promote the success of the Company under Section 172. What a consistently excellent standard means to Barclays We are holding ourselves to a high standard across: Service: Precision: Focus: Simplicity: world-class service for clients and customers, every time in our operations, our risk management and our controls on businesses and projects where we can excel simplicity and efficiency, seeking out every opportunity to automate Diversity of thought: championing new thinking, and challenging the status quo The Board recognises that in order to drive change across the organisation it is key that colleagues understand and believe in the aims of the programme and recognise their personal accountability for delivering the right outcomes, including their role in challenging processes and controls that can be improved or simplified. To support this, a high profile internal campaign led by the Group Executive Committee has been launched which recognises and celebrates the successes of colleagues in driving simplification, and risk and control improvements across the organisation, providing real examples which bring the aim of the programme to life. Throughout 2023, a programme of events has been held for management level colleagues, the aim of which is to ensure senior colleagues understand the importance of the programme objectives and that they are supported in developing the skills they need to implement and embed the change in the organisation. This included Consistently Excellent workshops for our senior leaders, to help create a common understanding across the Group. In 2024, all colleagues will be invited to attend these workshops. As part of that programme, our Group Chief Executive interviewed Brian Gilvary, our Senior Independent Director, about his experiences during his executive career of dealing with operational challenges and cultural change programmes. A key part of achieving the aims of this cultural change programme is driving operational excellence. The Board Audit Committee has oversight of the execution and sustainable embedding of the Group’s key remediation programmes, and received regular briefings throughout the year on the progress of these programmes, including deep dives into specific projects. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Section 172(1) statement (continued) The Board recognises that a cultural and behavioural change programme of this nature is both complex and multi-year and, as such, the embedding and sustainability of this programme will continue to be an area of focus for the Board throughout 2024 and beyond. A key area to achieving success in this area is the related work to identify lessons learned from these remediation programmes, and to embed those learnings into standard business practices. The Board has discussed with management the need to ensure that desired outcomes are measured and tracked, with regular insight being provided to the Board and management relating to improvements in customer experience, operational excellence, risk management, colleague behaviour and financial delivery. “To be a consistently excellent organisation, we must be ambitious and focused... with each of us taking personal accountability” C. S. Venkatakrishnan Group Chief Executive Our Group Chief Executive, C.S. Venkatakrishnan, together with Group Executive Committee members, Sasha Wiggins and Vim Maru, discussing what it means to deliver to a consistently excellent standard with colleagues in Wilmington, USA. Barclays PLC Annual Report 2023 39 A Consumer Duty lens has been applied in the development of the Barclays Group-wide change programme, Consistently Excellent, with the spirit of the Consumer Duty reflected in the ‘world-class service for clients and customers’. In May 2023, the Chairman, together with Mary Francis (as BBPLC Consumer Duty Champion) and the BBUKPLC Consumer Duty Champion, visited our contact centre in Wavertree, Liverpool, to experience Consumer Duty in action, meeting with customer-facing colleagues and learning about how Barclays is addressing vulnerable customer needs. In late 2023, the Board received a further progress report on the continuing work to operationalise and embed the Consumer Duty across the Group, the roll-out of new Consumer Duty management information and ongoing planning for the second implementation date of 31 July 2024 for closed products. One continuing area of Board focus is the Group oversight of work to develop robust data and monitoring capabilities to assess customer outcomes and identify potential or actual risks, and for reporting at business, Executive and Board level. Given the Group-wide significance of the Consumer Duty, throughout 2023, there has been extensive engagement by the Boards of BPLC, BBPLC and BBUKPLC on this subject. The Board will continue its oversight of BBPLC and BBUKPLC's embedding and implementation of the Consumer Duty in 2024, noting that, from July 2024, each of the BBPLC and BBUKPLC Boards is required to review and approve its first assessment as to whether each business is delivering good outcomes for its retail customers which are consistent with the Consumer Duty. Implementing and embedding the new FCA Consumer Duty In July 2023, the Financial Conduct Authority's (FCA) Consumer Duty came into force. The Consumer Duty is a new outcomes-based regulation, designed to ensure relevant financial services firms deliver good outcomes for retail customers consistent with the three cross-cutting rules to (i) act in good faith, (ii) avoid causing foreseeable harm, and (iii) enable and support retail customers, and the four retail customers outcomes relating to: (i) products and services, (ii) price and value, (iii) consumer understanding, and (iv) consumer support. The implementation of, and ongoing compliance with, the Consumer Duty is the responsibility of the operating entities within the Group, primarily BBPLC and BBUKPLC. However, given the significance of the Consumer Duty, the Board also provides relevant oversight of the Consumer Duty across the Group. In this respect, in February 2023, the Board approved changes to its Matters Reserved in order to reflect its responsibility for this oversight. Throughout the first half of 2023, the Board retained oversight of Barclays' planning for the first Consumer Duty implementation deadline of 31 July 2023 for in-scope products and services. In addition to receiving its regular updates on the status of the Group’s implementation plans, the Board received a final update on the Group's overall compliance readiness shortly before the July implementation deadline. This update included information on work conducted to ensure all relevant Group frameworks align with the Consumer Duty rules and guidance and ongoing work to embed the Consumer Duty, including the roll-out of mandatory Consumer Duty training for colleagues. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Non-financial and sustainability information statement Barclays PLC Annual Report 2023 40 Non-financial and sustainability information statement The non-financial and sustainability reporting requirements (including the new climate-related financial disclosures) contained in Sections 414CA and 414CB of the Companies Act 2006 have been addressed through a combination of summary text and cross referencing to other sections of the Annual Report. We have used cross-referencing as appropriate to deliver clear, concise and transparent reporting. In addition to the information referred to in the table below, further information about the impact of our activities can be found in the following sections of the Annual Report: Part 1 of this statement addresses the non- financial information requirements set out in section 414CB(1) and (2). Part 2 of this statement addresses the new climate-related financial disclosure requirements set out in section 414CB(A1) and (2A). Part 1 Relevant information relating to business model, principal risks and non-financial key performance indicators can be found in the following sections of the Annual Report: Business model Principal risks Section Managing risk Principal Risk management Risk performance Pages 10, 60-65 51-53 272-283* 284-362* Key performance indicators Impact Environmental matters 73 - 79, 80 - 100, 124 - 125, 236 - 237 26, 29, 33, 36, 75, 88, 103 Company employees Social matters Respect for human rights Anti corruption and bribery matters 27 - 29, 246, 250 24 - 26, 30 - 33, 236 - 237, 238 - 239, 239 - 241, 242 - 244 238 - 239, 239 - 241 249 Note: * in Part 3 of the Report In relation to the requirements relating to policies, we have a range of statements and policy positions designed to support key outcomes for all of our stakeholders, some of which can be found here: home.barclays/ sustainability/esg-resource-hub/ These policies and statements are in place with the aim of ensuring strengthened risk management and consistent governance. In order to maintain these policies and statements, the relevant documents are reviewed periodically. Performance against our strategic key performance indicators for our stakeholder groups, as shown from page 23, is one indicator of the effectiveness and outcome of policies and guidance. We have included summary information in relation to these statements and policies in the table below, providing cross references to additional content contained in the Annual Report where appropriate: Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 41 Non-financial and sustainability information statement (continued) Environmental-related statements and policies Environmental-related statements and policies (continued) Statement or policy position Description World Heritage Site and Ramsar Wetlands statement We understand that industries can impact areas of high biodiversity value including United Nations Educational, Scientific and Cultural Organization (UNESCO) World Heritage Sites and Ramsar Wetlands and their buffer zones. Our statement outlines our restrictions and client due diligence approach that aims to preserve and safeguard these sites. Climate Risk Policy The Climate Risk Policy outlines the requirements and policy objectives for assessing and managing the impact on Financial and Operational Risks arising from the physical and transition risks associated with climate change. This incorporates identification, measurement, management and reporting for Financial and Operational Risks. Risks associated with Climate Change are being managed in accordance with the requirements set out in this policy. Information to help understand our Group and its impact, policies, due diligence and outcomes See our: • • • ‘Managing impacts in lending and financing’ section in Part 3 of the Annual Report (page 236 onwards). ‘Restrictive policies’ section in Part 2 of the Annual Report (page 100), ‘Our approach to nature and biodiversity’ section in Part 2 of the Annual Report (page 124). • See our Climate risk section from page 272 in Risk Review in Part 3 of the Annual Report. Statement or policy position Description Climate Change statement The Barclays Climate Change Statement sets out our approach based on a consideration of all risk and market factors to certain energy and power sectors with higher carbon-related exposures or emissions from extraction or consumption, or those which may have an impact on certain sensitive environments or on communities, namely thermal coal mining, coal-fired power generation, mountain top coal removal, upstream oil and gas and unconventional oil and gas including oil sands, Arctic oil and gas, Amazon oil and gas, hydraulic fracturing ('fracking'), ultra-deep water and extra heavy oil. The statement outlines Barclays' focus on supporting our clients to transition to a low-carbon economy, while helping to limit the threat that climate change poses to people and to the natural environment. We conduct due diligence on a case-by-case basis on clients in sensitive energy sectors that fall outside the restrictions set out in our statement. Forestry and Agricultural Commodities statement We recognise that forestry and agricultural commodities sectors are responsible for producing a range of agricultural commodities such as timber, pulp & paper, palm oil, beef and soy that are often associated with environmental and social impacts, including climate change, deforestation, biodiversity loss and human rights issues. Our Forestry and Agricultural Commodities Statement outlines our restrictions and due diligence approach for clients involved in these activities, Information to help understand our Group and its impact, policies, due diligence and outcomes See our: • • ‘Managing impacts in lending and financing’ section in Part 3 of the Annual Report (page 236 onwards). ‘Restrictive policies’ section in Part 2 of the Annual Report (page 100), • Our approach to nature and biodiversity section in Part 2 of the Annual Report (page 124). • Our strategy, selected targets and progress: 2) Reducing our financed emissions – Restrictive policies section in Part 2 of the Annual Report (page 63). See our: • • • ‘Managing impacts in lending and financing’ section in Part 3 of the Annual Report (page 236 onwards). ‘Restrictive policies’ section in Part 2 of the Annual Report (page 100). ‘Our approach to nature and biodiversity’ section in Part 2 of the Annual Report (page 124). Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 42 Non-financial and sustainability information statement (continued) Human rights-related statements Colleagues and suppliers Statement or policy position Description Human rights Modern slavery Defence and Security sector Barclays' human rights statement expresses our commitment to respecting human rights as defined in the International Bill of Human Rights and the International Labour Organisation’s Declaration on Fundamental Principles and Rights at Work. Our approach to respecting human rights is guided by the UN Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct. The statement provides an overview of the evolving framework of policies and processes that seek to embed these commitments across our business. Barclays publishes a Modern Slavery Statement made according to the requirements of section 54 of the UK Modern Slavery Act 2015 and section 14 of the Australian Modern Slavery Act 2018 (Cth). We recognise that the nature of our business and global footprint means we may be exposed to modern slavery risks across our operations, supply chain, and customer and client relationships. We are committed to trying to identify and seeking to address human rights risks, such as modern slavery, across our value chain. In this Statement we report the progress made over the course of the year and outline our plans for the year ahead. Barclays' Statement on the Defence and Security Sector outlines our approach to defence-related transactions and relationships. We recognise that various types of defence equipment are considered necessary for achieving internationally accepted goals, such as legitimate national defence and security purposes as set forth in the Charter of the United Nations, or peacekeeping missions. At the same time, we also recognise that the Defence and Security Sector involves equipment and activities that have the potential to lead to significant impacts on individuals, communities and the broader geopolitical landscape. Barclays conducts enhanced due diligence as appropriate on clients in scope of the Defence and Security Statement. Information to help understand our Group and its impact, policies, due diligence and outcomes See our: • ‘Managing impacts in lending and financing’ section in Part 3 of the Annual Report (page 236 onwards). • Other Governance within the Governance report in Part 3 of the Annual Report (Page 230). See our: • ‘Managing impacts in lending and financing’ section in Part 3 of the Annual Report (page 236 onwards). • Other Governance within the Governance report in Part 3 of the Annual Report (Page 230). See our: • • ‘Managing impacts in lending and financing’ section in Part 3 of the Annual Report (page 236 onwards). ‘Restrictive policies’ section in Part 2 of the Annual Report (page 100). Statement or policy position Description Code of Conduct Board Diversity and Inclusion Policy Third-party code of conduct Statement of Commitment to Health & Safety Information to help understand our Group and its impact, policies, due diligence and outcomes • See The Barclays Way section from page 245 in Other Governance within the Governance report in Part 3 of the Annual Report. The Barclays Way is our code of conduct which outlines the Purpose, Values and Mindset that govern our way of working across our business globally. It constitutes a reference point covering all aspects of colleagues’ working relationships, and provides guidance on working with colleagues, customers and clients, governments and regulators, business partners, suppliers, competitors and the broader community with the aim of creating the best possible working environment for our colleagues. The Board Diversity and Inclusion Policy is designed to ensure that all Board appointments and succession plans are based on merit and objective criteria, recognising the benefits of diversity, in all its forms, and that due regard is given to diversity and inclusion characteristics when considering Board Committee appointments. The Policy sets out measurable objectives for achieving diversity on the Board, including the Board's current target to ensure that, by 2025, the proportion of women on the Board is at least 40 per cent. • See our section on diversity within the report of the Board Nominations Committee on page 158 of Part 3 of the Annual Report. Our approach to the way we do business needs to be adopted by our suppliers when acting on behalf of Barclays. To ensure a common understanding of our approach which will help us collectively drive the highest standards of conduct, we have created our Third Party Code of Conduct, which details our expectations for Environmental Management, Human Rights, Diversity and Inclusion; and living the Barclays Values. Barclays health, safety and wellbeing statement of commitment sets out the Bank’s commitment to protecting the safety and wellbeing of our employees, customers, suppliers, and any individuals using our premises, by providing and maintaining a safe working environment that protects both physical and mental wellbeing. The effective implementation of the statement of commitment has resulted in the continual improvement of health and safety related performance and proactive hazard management, as well as increasing the number of sites where Barclay’s occupational health and safety management system is independently certified to ISO45001. • See “Supporting our Supply Chain” within ESG Governance on page 238. • See our health and safety section from page 250 in Other Governance within the Governance report in Part 3 of the Annual Report. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Non-financial and sustainability information statement (continued) Governance and Financial Crime statements Governance and Financial Crime statements Statement or policy position Description Information to help understand our Group and its impact, policies, due diligence and outcomes Financial Crime Statement We have adopted a holistic approach to financial crime risk management and have one group-wide Financial Crime Policy. It is designed to ensure that Barclays has adequate systems, procedures, and controls in place to manage the risk of being used to facilitate financial crime and to manage the legal, regulatory, and reputational risks associated with financial crime. • See the Financial Crime section from page 249 in Other Governance within the Governance report in Part 3 of the Annual Report. Statement or policy position Resilience Description Barclays maintains a robust resilience framework focusing on the end-to-end resilience of the business services we provide to customers and clients, aiming to ensure that all service components can deliver during business disruptions, crises, adverse events and other types of threats. Barclays PLC Annual Report 2023 43 Information to help understand our Group and its impact, policies, due diligence and outcomes • See the managing data privacy, security and resilience section from page 251 in Other Governance within the Governance report in Part 3 of the Annual Report. Tax Our Tax Principles are central to our approach to tax planning, for ourselves or on behalf of our clients. We believe our Tax Principles have been a strong addition to the way we manage tax, ensuring that we take into account all of our stakeholders when making decisions related to our tax affairs. The same applies to our Tax Code of Conduct which is designed to ensure we file our returns on time and pay the correct amount of tax in a responsible and transparent manner. • See the tax section from page 247 in Other Governance within the Governance report. • Barclays PLC Country Snapshot report at home.barclays/ annualreport The Financial Crime Policy is supported by group-wide Standards that focus on four key risks anti-bribery & corruption (ABC); anti- money laundering & counter-terrorist financing (AML); anti-tax evasion facilitation (ATEF) and sanctions, including proliferation financing, and is: • Designed to ensure that all employees and Barclays businesses globally comply with UK, extra-territorial and locally applicable legal and regulatory obligations, • Designed to create an integrated and consistent framework upon which Barclays manages financial crime risk, • Supported by the Barclays Board of Directors, • Approved by the Group Chief Compliance Officer (member of the Group Executive Committee), and • Regularly reviewed to ensure it remains up to date. Barclays aims to ensure that the privacy and security of personal information is respected and protected. Our privacy notices, available on our websites, describe how we collect, handle, store, share, use and dispose of information about people. We regard sound privacy practices as a key element of corporate governance and accountability. Barclays carefully evaluates non-profit organisations prior to partnering with them to ensure they align with its values. Barclays will not make any donation that is, or could be perceived to be, an incentive to win or retain business or one that delivers a business advantage. We will not make any donation that is contrary to Barclays Financial Crime Policy (Anti-Bribery & Anti-Corruption Policy, Sanctions), or any other Barclays Compliance policies and standards. Barclays is unfortunately unable to provide funding to many of the requests that we receive and does not accept unsolicited donation requests. • See the managing data privacy, security and resilience section from page 251 in Other Governance within the Governance report in Part 3 of the Annual Report. • See our donation guidelines at: home.barclays/content/ dam/home-barclays/ documents/citizenship/ our-reporting-and-policy- positions/Barclays- donation-guidelines.pdf Data protection Donations Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 44 Non-financial and sustainability information statement (continued) Part 2 Relevant information in relation to the climate-related financial disclosures is set out below, using cross- referencing to other sections of the Annual Report where appropriate. Given the similarities in these disclosure requirements with the TCFD recommended disclosures, and in order to avoid unnecessary duplication and deliver concise reporting, we have chosen to present the climate-related financial disclosures alongside information relating to the related TCFD recommended disclosures. Climate-related financial disclosures index CA 2006 requirement Detail Section 414CB(2A)(a) A description of the company’s governance arrangements in relation to assessing and managing climate-related risks and opportunities TCFD Section Governance Recommendation Summary a) We describe the Board's oversight of climate-related risks and opportunities The Board is responsible for the overall leadership of Barclays PLC, including setting the Group's climate strategy. The Board and, as appropriate, its Committees are responsible for the oversight of climate-related risks and opportunities in the Group. Each Board Committee has its own Committee Terms of Reference clearly setting out its remit and decision-making powers, including those relating to climate matters. Page references within Parts 2 and 3 of the Annual Report 154, 180 - 182 232 b) We describe management's role in assessing and managing climate-related risks and opportunities Oversight and management of Barclays' climate strategy is increasingly embedded in business-as-usual management structures, including a number of executive committees. 121 - 123, 233 - 235 The executive management committees receive regular briefings on matters including climate change. Both risks and opportunities are considered by management. Climate- related risks are assessed and escalated as appropriate through the various risk forums. In 2023, the Group Sustainability Committee was established as a dedicated forum to identify and discuss climate-related matters across the Group with a specific mandate to review and propose updates to the Group Climate strategy prior to approval by Group ExCo. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 45 Non-financial and sustainability information statement (continued) Climate-related financial disclosures index TCFD Section Strategy CA 2006 requirement Detail Section 414CB(2A)(d) A description of: (i) the principal climate-related risks and opportunities arising in connection with the company’s operations, and (ii) the time periods by reference to which those risks and opportunities are assessed Section 414CB(2A)(e) A description of the actual and potential impacts of the principal climate-related risks and opportunities on the company’s business model and strategy Recommendation Summary a) We describe the climate-related risks and opportunities the organisation has identified over the short, medium and long term Climate risk is defined as the impact on Financial (Credit, Market, Treasury & Capital) and Operational Risks arising from climate change through physical risks and risks associated with transitioning to a lower carbon economy. Barclays faces exposure to climate-related risks, either directly through its operations and infrastructure or indirectly through its financing and investment activities. Time horizons are considered based on Barclays' planning cycles. Page references within Parts 2 and 3 of the Annual Report 67 – 71, 272, 284 – 290 Barclays has enhanced its focus on sustainable finance over the last two years. At the end of 2022, we announced a new target to facilitate $1trn of Sustainable and Transition Finance. This followed a review of the financing requirements arising from the global transition to a low-carbon economy if the world is to avoid the worst effects of climate change and the potential addressable market for Barclays. During 2023 we built on this work to develop a Group-wide sustainable finance strategy to operationalise our ambition. b) We describe the impact of climate- related risks and opportunities on the organisation's businesses, strategy and financial planning Barclays’ 2023 financial planning process included a review of our strategy, its implementation and tracking our progress on climate related targets, as well as, capturing a view of climate-related risks and opportunities, which aligns with how we manage other risks. 72 – 129 Section 414CB(2A)(f) An analysis of the resilience of the company’s business model and strategy, taking into consideration different climate-related scenarios c) We describe the resilience of the organisation's strategy, taking into consideration different climate-related o C or lower scenario scenarios, including a 2 Our planning process also considered current climate policies to ensure they are included in the base scenario. The planning process included an assessment of our financed emissions reduction targets for some of our highest emitting sectors. We also considered impairment over the horizon of the financial plan. At this point in time, there are no material amendments required to the financial plan. Our Sustainable and Transition Financing target of $1tn is a key driver of our finance planning process with pathway to achieve this as well as risks and opportunities reviewed and agreed with business heads. Barclays has performed two group wide climate stress tests during 2023, over and above existing macroeconomic internal stress tests, to assess Barclays’ financial resiliency to climate risks. 131 - 136 The two scenarios include both physical and transition risks, including assessment of a tipping point (H1) as well as the knock on macroeconomic impacts (H2). Results from the exercises have been integrated into Barclays internal capital adequacy assessment process to ensure Barclays remains sufficiently capitalised to both climate and macroeconomic stresses. The outputs are considered within Climate Risk Management and Financial Planning processes, such as assessment of climate impacts to ECL. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 46 Non-financial and sustainability information statement (continued) Climate-related financial disclosures index CA 2006 requirement Detail Section 414CB(2A)(b) A description of how the company identifies, assesses, and manages climate-related risks and opportunities TCFD Section Risk management Section 414CB(2A)(c) A description of how processes for identifying, assessing, and managing climate-related risks are integrated into the company’s overall risk management process Recommendation Summary a) We describe the organisation's processes for identifying and assessing climate-related risks b) We describe the organisation's processes for managing climate-related risks c) We describe how processes for identifying, assessing and managing climate-related risks are integrated into the organisation's overall risk management The impact of climate risk drivers are observed in Barclays' portfolio through its traditional risk categories such as credit risk, market risk, treasury and capital risk , operational risk and reputational risk. Barclays continues to develop and enhance processes for identifying, assessing and managing climate-related risks and drive integration of climate risk into its business activities and operations. Climate Risk is a Principal Risk under Barclays' Enterprise Risk Management Framework. A Climate Risk Framework, Climate Risk Policy and relevant governance structures have been developed to foster a systematic and consistent approach for managing climate risk across the firm. Barclays has also established a climate risk appetite at the Group-level. Page references within Parts 2 and 3 of the Annual Report 67 – 69, 272 – 276 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 47 Non-financial and sustainability information statement (continued) Climate-related financial disclosures index CA 2006 requirement Detail Section 414CB(2A)(h) A description of the key performance indicators (KPIs) used to assess progress against targets used to manage climate-related risks and realise climate-related opportunities and of the calculations on which those KPIs are based TCFD Section Metrics & Targets Recommendation Summary a) Our metrics used to assess climate- related risks and opportunities in line with our strategy and risk management processes In line with our three-part climate strategy, we have set financed emissions 2030 reduction targets across eight high emitting sectors in our portfolio (with the addition this year of targets for the Aviation, Agriculture and UK Commercial Real Estate sectors). Page references within Parts 2 and 3 of the Annual Report 67 – 71 N/A N/A b) Our Scope 1, Scope 2 and Scope 3 operational greenhouse gas (GHG) emissions and the related risks Section 414CB(2A)(g) A description of the targets used by the company to manage climate- related risks and to realise climate- related opportunities and of performance against those targets c) Our targets used to manage climate- related risks and opportunities and performance against targets We have also expanded the scope of our UK Housing convergence point this year, as detailed on page 98. Each of our 2030 target ranges is developed with reference to a 1.5°C-aligned scenario, such as the IEA Net Zero by 2050 scenario. We have reported our progress against each of these targets as at December 2023, as detailed on page 86. We have additionally calculated the financed emissions for the full in-scope balance sheet as at December 2022. This has enabled us to calculate the coverage of our reduction targets across our portfolio (including integration of 1.5 degree aligned scenarios, with ranges for certain sectors) and to assess the extent to which the business is aligned to a well-below 2 degrees pathway. Our calculations indicate that we have set reduction targets for 55% of our overall Scope1,2 financed emissions. We also note our progress against our sustainable and transition financing between 2023 and the end of 2030, our green financing between 2018-2030, and our balance sheet investment by the end of 2027. We measure our Scope 1, Scope 2 and Scope 3 emissions and report these against our net zero operations strategy, as set out on pages 73-79. 75, 88 On our financed emissions, we have: i. Estimated the full in-scope balance sheet financed emissions as at December 2022 using a methodology developed based on the PCAF Standard as set out on pages 80-83; and ii. Calculated financed emissions and physical intensities for specific activities as at December 2023 where we have set 2030 targets which include the integration of 1.5°C aligned scenarios, such as the IEA Net Zero 2050 scenario in our financed emission targets, and including the upper end of ranges for certain sectors, as set out on page 89 Alignment of our client portfolios to the goals and timelines of the Paris Agreement underpinned by Barclays' BlueTrack™ Methodology. Progress reported against the following sector targets: Energy, Power, Cement, Steel, Automotive Manufacturing and UK Housing (where we have set a convergence point). Targets have also been set in 2023 for the first time against the following sectors: UK Commercial Real Estate, Agriculture, and Aviation. Progress against our target to facilitate $1 trillion of Sustainable and Transition Finance between 2023 and the end of 2030. 75, 88, 103 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Task Force on Climate-related financial disclosure statement of compliance Barclays PLC Annual Report 2023 48 Task Force on Climate- related financial disclosure statement of compliance We have considered our obligations under the UK's Financial Conduct Authority's Listing Rules and confirm that we have made disclosures consistent with the relevant Listing Rules and the Taskforce for Climate-related Financial Disclosures (TCFD) Recommendations and Recommended Disclosures. Given the similarities between the TCFD Recommended Disclosures and the new climate- related financial disclosures (required further to sections 414CA and 414CB of the Companies Act 2006), and in order to avoid unnecessary duplication and deliver concise reporting, we have chosen to present information relating to the TCFD recommended disclosures alongside the relevant Companies Act 2006 requirements. For further information on where these disclosures can be found please refer to pages 44 to 47 of this report. Looking ahead: TCFD sector specific requirements for asset managers We continue our work to implement the TCFD sector specific guidance for asset managers (which represents a small part of our overall business) in accordance with the FCA Enhanced Climate-Related Disclosure Requirements for Asset Managers. We will report on this work during 2024, recognising the industry-wide challenge with data availability and accuracy to meet these requirements. + Further details on the TCFD Recommendations and Recommended Disclosures are available at: fsb-tcfd.org Full list of metrics and targets can be found in the ESG Data Centre at: home.barclays/sustainability/esg-resource-hub/ reporting-and-disclosures/ Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements ESG Ratings and Benchmarks ESG ratings performance We remain committed to enhancing our disclosures and to engaging with industry-led initiatives intended to support an effective and trusted ESG ratings market. In 2023, Barclays continued engaging with key ESG ratings agencies to provide clear and consistent disclosures to our stakeholders. Five of the ratings we track were unchanged, two declined, and three improved. The ESG ratings market is moving towards a more regulated environment in the EU. Here in the UK, an industry-led working group launched a Code of Conduct for ESG ratings and data product providers. Barclays supports the Code's principles of transparency, good governance, management of conflicts of interest, and robust controls. + Please also refer to page 144 in Part 3 of the Annual Report for details of BPLC Board consideration of matters relating to the reporting and monitoring of ESG-related data in addition to how we manage Climate across our Board structures within the Other Governance section from page 230 in Part 3 of the Annual Report. Barclays PLC Annual Report 2023 49 Select ESG ratings and benchmarks MSCI ESG Rating ISS QualityScore Environment Scale (best to worst): AAA to CCC Barclays’ rating was stable AA2022: AA 2021: AA 12022: 1 2021: 1 Scale (best to worst): 1 to 10 Barclays’ rating was stable Sustainalytics ESG Risk Rating ISS QualityScore Social 23.82022: 23.8 2021: 25.1 S&P Global CSA 59(90th percentile) Scale (best to worst): 0-100 Barclays’ rating was stable Scale (best to worst): 100 to 0 Barclays’ rating and relative performance declined Scale (best to worst): 1 to 10 Barclays’ rating was stable 12022: 1 2021: 1 ISS QualityScore Governance Scale (best to worst): 1 to 10 Barclays' rating improved 42022: 9 2021: 7 percentile) th 2022: 75 (95 2021: 78 (92 nd percentile) CDP Climate Change ISS ESG Corporate Score Scale (best to worst): A to D- Barclays' rating declined B2022: A- 2021: B Scale (best to worst): A+ to D Barclays’ rating improved C2022: C- 2021: C- FTSE Russell ESG Rating Moody’s ESG Solutions Scale (best to worst): 5 to 0 Barclays’ rating was stable and relative performance improved slightly 4.7(99th percentile) 622022: 55 2021: 55 Scale (best to worst): 100 to 0 with advanced (>60) Barclays’ rating improved percentile) th 2022: 4.7 (98 2021: 4.2 (92 nd percentile) Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements ESG-related reporting and disclosures ESG-related reporting and disclosures Barclays continues to support efforts for enhanced ESG reporting and advocates for consistency in approaches to disclosures, ratings and benchmarks, including the work of the International Sustainability Standards Board (ISSB). We participate in a range of regional and global industry efforts to promote increased harmonisation in approaches to data, taxonomies and disclosures. ESG Resource Hub Barclays' ESG Resource Hub provides more detailed technical information, disclosures and our position statements on environmental, social and governance matters. It is intended to be relevant for analysts, ESG investors, rating agencies, suppliers, clients and all other stakeholders. Further details can be found on the ESG Resource Hub at: home.barclays/sustainability/esg-resource-hub/ + Our ESG-related disclosures: UN Principles for Responsible Banking (PRB) Barclays was one of the founding signatories of the UN PRB. We report annually on how we are implementing the Principles. + home.barclays/sustainability/esg-resource-hub/reporting- and-disclosures/ The Barclays PLC PRB Report 2023 can be found at: TCFD-related reporting and disclosures Our climate-related financial disclosures are included within this Annual Report. The majority of the content can be found in Part 2 within the Climate and Sustainability report in addition to Part 3 within the Governance report and Risk review sections of the report. + For further details on where to access our TCFD-related disclosures, please see our Climate-related Financial Disclosures Summary and Index on page 44. Barclays PLC Annual Report 2023 50 Our approach to ESG reporting is informed by recognised external standards and frameworks. As these frameworks evolve, we will continue to assess and amend our approach to ESG disclosures appropriately. ESG Additional Reporting Disclosures KPMG LLP Limited Assurance Barclays provides additional disclosures within the ESG Resource Hub, including reporting with reference to the material topics from the Sustainability Accounting Standards Board (SASB) and the Global Reporting Initiative (GRI). ESG Data Centre Within the ESG Resource Hub, our ESG Data Centre continues to provide a central repository of climate, sustainability, and ESG-related data that is published within the Barclays PLC Annual Report in addition to additional data points and granularity. + The ESG Data Centre can be accessed online within our ESG Resource Hub at: home.barclays/sustainability/esg- resource-hub/reporting-and-disclosures/ Barclays appointed KPMG LLP to perform limited independent assurance over selected ESG content, marked with the symbol Δ. The assurance engagement was planned and performed in accordance with the International Standard on Assurance Engagements (UK) 3000 Assurance Engagements Other Than Audits or Reviews of Historical Financial Information and the International Standard on Assurance Engagements 3410 Assurance of Greenhouse Gas Statements. A limited assurance opinion was issued and is available at the website link below. This includes details of the scope, reporting criteria, respective responsibilities, work performed, limitations and conclusion. No other information in this Annual Report has been subject to this external limited assurance. + home.barclays/sustainability/esg-resource-hub/reporting- and-disclosures/ Further details on Limited Assurance can be found at: Annual Report • Taskforce for Climate-related Financial Disclosures (TCFD) Recommendations • ESG-related disclosures ESG-related reporting ESG data resources Other ESG resources Statements and policy positions Indices • Principles for Responsible Banking • ESG Data Centre • ESG Investor Presentations • ESG Resource Hub - Statements • Global Reporting Index (GRI) (PRB) Report • Fair Pay report / UK Pay Gaps report • (Tax) Country Snapshot report • Board Diversity Policy • Diversity, Equity and Inclusion report • Limited Independent Assurance statement • Barclays' Sustainable Finance Framework • Barclays' Transition Finance Framework and policy positions • Sustainability Accounting Standards Board (SASB) • BlueTrack Whitepaper TM • Corporate Transition Forecast Model Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Managing risk Barclays PLC Annual Report 2023 51 Prudently managing risk for stakeholders Barclays is exposed to internal and external risks as part of its ongoing activities. These risks are managed as part of our business model. Risk appetite Three lines of defence Monitoring the risk profile Enterprise Risk Management Framework (ERMF) At Barclays, risks are identified and overseen in accordance with the ERMF, which supports the business in its aim to embed effective risk management and a strong risk management culture. The ERMF governs the way in which Barclays identifies and manages its risks. The management of risk is then embedded into each level of the business, with all colleagues being responsible for identifying and controlling risk. In 2023, the Conduct Risk Principal Risk was renamed "Compliance Risk" and now incorporates Conduct Risk as well as risks from a failure to comply with laws, rules and regulations applicable to the firm. Risk appetite defines the level of risk we are prepared to accept across the different risk types, taking into consideration varying levels of financial and operational stress. Risk appetite is key to our decision-making processes, including ongoing business planning and setting of strategy, new product approvals and business change initiatives. The Group sets its risk appetite in terms of performance metrics as well as a set of mandate and scale limits to monitor risks (i.e. to ensure business activities are aligned with expectations and are of an appropriate scale relative to the risk and reward of the underlying activities). During 2023, the Group’s performance remained within its risk appetite limits. “The ERMF governs the way in which Barclays identifies and manages its risks.” The first line of defence is comprised of the revenue-generating and client-facing areas, along with all associated support functions, including Finance, Treasury, Human Resources and Operations and Technology. The first line identifies the risks, sets the controls and escalates risk events to the second line of defence. Employees in the first line have primary responsibility for their risks and their activities are subject to oversight from the relevant parts of the second and third lines. The second line of defence is made up of Risk and Compliance and oversees the first line by setting limits, rules and constraints on their operations, consistent with the risk appetite. The third line of defence is comprised of Internal Audit, providing independent assurance to the Board and Executive Committee on the effectiveness of governance, risk management and control over current, systemic and evolving risks. The Legal function provides support to all areas of the business and is not formally part of any of the three lines of defence, The Legal function is responsible for proactively identifying, communicating and providing legal advice on applicable laws, rules and regulations. Except in relation to the legal advice it provides or procures, it is subject to second line oversight with respect to its own operational and compliance risks, as well as with respect to the legal risks to which the Group is exposed. Together with a strong governance process, using business and Group-level Risk Committees as well as Board-level forums, the Board receives regular information in respect of the risk profile of the Group, and has ultimate responsibility for Group risk appetite and capital plans. Information received includes measures of risk profile against risk appetite as well as the identification of new and emerging risks, which are derived by mapping risk drivers, identified through horizon scanning, to risk themes, and similar analysis. During 2023, Barclays ran a stress test to assess its capital adequacy and resilience under a severe but plausible macroeconomic scenario. This stress test targeted risks such as inflation, financial stress and a shock on demand; with terminal low rates set to test the Group's vulnerabilities through Net Interest Income (NII) margin compression. The stress test outcome for macroeconomic tests assesses our full financial performance over the horizon of the scenario in terms of profitability, capital, liquidity and leverage to ensure the Group remains viable. + For further details of the stress test, please refer to page 55. We believe that our structure and governance supports us in managing risk in the changing economic, political and market environments. For further detailed analysis of approach to risk + management and risk performance, please see our full Risk review on pages 254 to 372 of Part 3 of the Annual Report Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 52 Managing risk (continued) The Enterprise Risk Management Framework defines nine Principal Risks Principal Risks Risks are classified into Principal Risks, as below How risks are managed Credit risk Market risk Treasury and Capital risk The risk of loss to the Group from the failure of clients, customers or counterparties (including sovereigns), to fully honour their obligations to the Group, including the whole and timely payment of principal, interest, collateral and other receivables. Credit Risk teams identify, evaluate, sanction, limit and monitor various forms of credit exposure, individually and in aggregate. The First Line delivers business plans and products within risk appetite and all limits set by the Second Line, by maintaining detailed financial forecasts, applying controls and managing risks to which they are exposed. The risk of loss arising from potential adverse changes in the value of the Group’s assets and liabilities from fluctuation in market variables including, but not limited to, interest rates, foreign exchange, equity prices, commodity prices, credit spreads, implied volatilities and asset correlations. Liquidity risk The risk that the Group is unable to meet its contractual or contingent obligations or that it does not have the appropriate amount, tenor and composition of funding and liquidity to support its assets. Capital risk The risk that the Group has an insufficient level or composition of capital to support its normal business activities and to meet its regulatory capital requirements under normal operating environments and stressed conditions (both actual and as defined for internal planning or regulatory testing purposes). This also includes the risk from the Group’s pension plans. Interest rate risk in the banking book The risk that the Group is exposed to capital or income volatility because of a mismatch between the interest rate exposures of its (non-traded) assets and liabilities. Market Risk teams use a range of complementary approaches to identify and evaluate traded market risk exposures. These risks are measured, limited and monitored by market risk specialists. The First Line conduct trading activities within the risk appetite and all mandate & scale limits set by the Second Line. Treasury and Capital risk is identified and managed by specialists in capital, liquidity and asset and liability management teams. A range of risk management approaches are used such as limits plan monitoring and stress testing. Climate risk The impact on Financial and Operational risks arising from climate change through physical risks, risks associated with transitioning to a low-carbon economy and connected risks 1 arising as a result of second order impacts on portfolios of these two drivers. The Group assesses and manages its climate risk across its businesses and functions in line with its net zero ambition by monitoring exposure to elevated risk sectors, conducting scenario analysis and risk assessments for key portfolios. The First Line delivers business plans and manages exposures within the climate risk appetite and limits set by the Second Line. Climate risk controls are embedded across the financial and operational principal risk types through the Barclays Group's frameworks, policies and standards. Note: 1 Definition of climate risk amended as part of the update climate risk policy in 2023. See page 67 for further detail. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 53 Managing risk (continued) The Enterprise Risk Management Framework defines nine Principal Risks Principal Risks Risks are classified into Principal Risks, as below How risks are managed Operational risk The risk of loss to the Group from inadequate or failed processes or systems, human factors or due to external events (for example, fraud) where the root cause is not due to credit or market risks. Model risk The potential for adverse consequences from decisions based on incorrect or misused model outputs and reports. Compliance risk The risk of poor outcomes for, or harm to, customers, clients and markets, arising from the delivery of the Group’s products and services (also known as 'Conduct risk') and the risk to Barclays, its clients, customers or markets from a failure to comply with the laws, rules and regulations applicable to the Group (also known as Laws, Rules and Regulations Risk, 'LRR Risk'). Reputation risk The risk that an action, transaction, investment, event, decision, or business relationship will reduce trust in the Group’s integrity and/or competence. Operational risks are managed in accordance with the Operational Risk Framework, owned and overseen by the Second Line, and the standards within the Barclays Control Framework. The primary responsibility for the management of operational risk rests within the business and functional units where the risk arises. Management complete Risk and Control Self-Assessments to assess operational risks and the effectiveness of the controls within processes. Identified risks, events and issues are escalated to senior management and the Board to ensure timely notification and to agree the appropriate response. The range of controls owned by First Line include: timely model identification, robust model development, testing, documentation, annual assessment, and ongoing performance monitoring. The range of controls owned by Second Line include: independent model validation, oversight over on-going model performance, and execution of overall model risk governance covering oversight and reporting and escalation to appropriate forums and committees. The First Line are accountable for the overall assessment and management of compliance risks in their business or function and are responsible for implementing the requirements outlined in the Compliance Risk Management Framework (CRMF). Compliance must oversee adherence to the CRMF and the management of compliance risk, and provide independent Second Line of Defence oversight to all Barclays businesses, providing advice and challenge where appropriate. Reputation risk is managed by embedding our Purpose and Values, and maintaining a controlled culture within the Group, with the objective of acting with integrity, enabling strong and trusted relationships to be built with customers and clients, colleagues and broader society. Each business assesses reputation risk using standardised tools and the governance is fulfilled through management committees and forums, clear escalation and reporting lines to the Group Board. Legal risk The risk of loss or imposition of penalties, damages or fines from the failure of the Group to meet applicable laws, rules and regulations or contractual requirements or to assert or defend its intellectual property rights. Legal risk is managed by the identification and management of legal risks by the legal function and the escalation of legal risk as necessary. The Group’s businesses and functions have responsibility for engagement of the Legal function in situations that have the potential for legal risk, Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Viability statement Consideration of the long-term viability of Barclays Barclays PLC Annual Report 2023 54 The financial statements and accounts have been prepared on a going concern basis. Provision 31 of the 2018 UK Corporate Governance Code requires the Directors to make a statement in the Annual Report regarding the viability of the Group, including an explanation of how they assessed the prospects of the Group, the period of time for which they have made the assessment and why they consider that period to be appropriate. Time horizon In light of the analysis summarised below, the Board has assessed the Group’s current viability, and confirms that the Directors have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the next three years. This time frame is used in management’s Working Capital and Viability Report (WCR), prepared at the start of February 2024. The WCR is a formal projection of capital and liquidity based upon formal profitability forecasts. The availability of the WCR gives management and the Board sufficient visibility and confidence on the future operating environment for this time period. The three-year time frame has also been chosen because: ▪ it is within the period covered by the formal medium-term plans approved by the Board which contain projections of profitability, cash flows, capital requirements and capital resources ▪ it is also within the period over which internal stress testing is carried out ▪ it is an appropriate horizon over which to consider the impacts of new regulations in the financial services industry. The Directors are satisfied that this period is sufficient to enable a reasonable assessment of viability to be made. Considerations In making its assessment the Board has: ▪ carried out a robust and detailed assessment of the Group’s risk profile and material existing and emerging risks (see below for further details), in particular those risks which senior management believes could cause the Group’s future results of operations or financial condition to differ materially from current expectations or could adversely impact the Group’s ability to meet its material regulatory requirements ▪ reviewed how those risks are identified, managed and controlled (further detail provided on pages 51 to 53) ▪ considered the WCR which provides an assessment of forecast CET1, leverage, Tier 1 and total capital ratios, as well as the build-up of minimum requirement for own funds and eligible liabilities (MREL) up to the end of 2025 ▪ considered the Group’s Medium Term Plan ▪ reviewed the Group’s liquidity and funding profile, including forecasts of the Group’s Internal Liquidity Stress Test (ILST), regulatory Liquidity Coverage Ratios (LCR) and Net Stable Funding Ratios (NSFR) ▪ considered the Group’s viability under a specific internal stress scenario (see below for further detail) ▪ considered the stability of the major markets in which it operates, supply chain resilience and material known regulatory changes to be enacted ▪ considered the sustainability of any future capital distributions ▪ considered scenarios which might affect the operational resilience of the Group ▪ considered factors that may inform the impact of a severe recession in major economies with affordability pressures on consumers from high inflation and rising interest rates, energy supply pressures, and financial markets instability ▪ considered the impact of the Group’s ambition to be a net zero bank by 2050 and support its clients’ transition to a low-carbon economy, including the need to continue to incorporate climate considerations into its strategy, business model, the products and services it provides to customers and its financial and non-financial risk management processes ▪ ▪ reviewed the draft statutory accounts and the financial performance of the Group reviewed the possible impact of legal, competition and regulatory matters set out in Note 25 to the financial statements on pages 470 to 474. The Group's Medium Term Plan is based on assumptions for macroeconomic variables such as interest rates, inflation, unemployment, which have been consistently applied for the purpose of forecasting the Group’s capital and liquidity position and ratios, as well as any credit impairment charges or releases. Assessment of the Group's risk profile Risks faced by the Group’s business, including in respect of financial, conduct and operational risks, are controlled and managed within the Group in line with the ERMF. Executive management sets a risk appetite for the Group, which is then approved by the Board. Limits are set to control risk appetite, within which businesses are required to operate. Management and the Board then oversee the ongoing risk profile. Internal Audit provides independent assurance to the Board and Executive Committee over the effectiveness of governance, risk management and control over current and evolving risks. A full set of material risks to which the organisation is exposed can be found in the material existing and emerging risks on pages 258 to 271 . Certain risks are additionally identified as key themes and monitored closely by the Board and Board Committees. These are chosen on the basis of their potential to impact viability during the time frame of the assessment but in some instances the risks may continue beyond this time frame. Barclays PLC Annual Report 2023 55 The results of the macroeconomic internal stress test were approved by the Board Risk Committee and allowed the Board to approve the Medium Term Plan as being able to sustain a severe but plausible scenario and remain within risk appetite. Based on current forecasts, taking account of material known regulatory changes to be enacted and having considered possible stress scenarios, the current liquidity and capital position of the Group continues to support the Board’s assessment of the Group’s viability. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Viability statement (continued) These particular risks include: ▪ the potential impact of increased recession risk heightened by the turbulent geopolitical outlook and volatile market conditions ▪ ▪ failure to successfully adapt the Group’s operations and business strategy to address the financial risks resulting from both: (i) the physical risk of climate change; and (ii) the risk from the transition to a low-carbon economy legal proceedings, competition, regulatory and conduct matters giving rise to the potential risk of penalties, damages or fines, loss of regulatory licences and permissions and other sanctions, as well as potential adverse impacts on our reputation with clients and customers and on investor confidence and/or potentially resulting in adverse impacts on capital, liquidity and funding ▪ sudden shocks or geopolitical instability in any of the major economies in which the Group operates which could alter the behaviour of depositors and other counterparties, affect the ability of the firm to maintain appropriate capital and liquidity ratios or impact the Group's credit ratings ▪ evolving operational risks (notably cyber security, technology and resilience) and the ability to respond to the new and emerging technologies in a controlled fashion. As a universal bank with a diversified and connected portfolio of businesses, servicing customers and clients globally, the Group is impacted in the longer term by a wide range of macroeconomic, political, regulatory and accounting, technological, social and environmental developments. The evolving operating environment presents opportunities and risks in respect of which the Group continues to evaluate and take steps to appropriately adapt its strategy and its delivery. Stress tests The Board has also considered the Group’s viability under a specific internal stress scenario. The latest macroeconomic internal stress test, conducted in H2 2023, targets risks such as inflation, financial stress and a shock on demand; with terminal low rates set to test Barclays’ vulnerabilities through NII margin compression: • severe UK recession (GDP low point -4.5%) brought by falling household real incomes, job losses leading to 8.3% unemployment rate, declining economic confidence and tight financial conditions. Other major economies experience very similar shocks • high interest rates (peak 8.5% UK, 8.5% US) lead to additional stress in banking and non- banking sectors. As financial conditions tighten, central banks rapidly reverse policy and low interest rates persist (1% UK, 1.5% US) to stimulate the economy and avoid an even worse outcome • inflation, after a short-term spike (UK 10.4%, US 8.1%), begins to reduce towards the end of 2025 gradually falling to 2% in the outer year forecast horizon. The short-term affordability pressures on customers ease as interest rates and inflation falls • residential house prices in the UK decline 33% while in the US commercial real estate prices fall 45%, reflecting the contagion effects from the financial markets. The stress test outcome for macroeconomic tests assesses our full financial performance over the horizon of the scenario in terms of profitability, capital, liquidity and leverage to ensure we remain viable. In addition to a macroeconomic internal stress test, a climate internal stress test was run this year and presented to the Board Risk Committee for approval. See page 176. The exercise confirmed the Bank is financially resilient to climate risks. Refer to the 'scenario analysis' section in page 131 for the key learnings from the climate internal stress test. The Group-wide stress testing framework also includes internal reverse stress testing assessments, conducted once a year, which aim to identify the circumstances under which the Group’s business model would no longer be viable, leading to a significant change in business strategy and to the identification of appropriate mitigating actions. Examples include extreme macroeconomic downturn (‘severely adverse’) scenarios, or specific one-off events, covering both operational risk and capital/liquidity items. Reverse stress testing is used to help support ongoing risk management and is an input to the Group’s recovery planning process. Legal proceedings, competition, regulatory and remediation/redress conduct matters are also assessed as part of the stress testing process. Capital and the ILST are set at a level designed to enable the Group to withstand various stress scenarios. As part of this process, management also identified actions, including cost reductions and withdrawal from lines of business, available to restore the Group to its desired capital flight path. These internal stress tests informed the conclusions of the WCR. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial information Shareholder information Annual General Meeting (AGM) Location SEC (Scottish Event Campus) Armadillo, Exhibition Way, Glasgow G3 8YW And electronically on an online platform Date Thursday, 9 May 2024 Time 11.00am The arrangements for the Company’s 2024 AGM and details of the resolutions to be proposed, together with explanatory notes and how to attend the meeting, will be set out in the Notice of AGM to be published on the Company’s website (home.barclays/agm). Key dates 1 March 2024 Full year dividend record date 3 April 2024 Full year dividend payment date 25 April 2024 Q1 2024 Results Announcement 9 May 2024 Annual General Meeting at 11.00am Barclays PLC Annual Report 2023 56 Keep your personal details up to date Please remember to tell Equiniti if: • you move; or • you need to update your bank or building society details. If you are a Shareview member, you can update your bank or building society account or address details online. If you are not a Shareview member you can update details quickly and easily over the telephone using the Equiniti contact details on the next page. Dividends The Barclays PLC 2023 full year dividend for the year ended 31 December 2023 will be 5.30p per share, making the 2023 total dividend 8.00p per share. Dividend Reinvestment Plan Barclays offers a share alternative in the form of a dividend reinvestment plan (DRIP) for those shareholders who wish to elect to use their dividend payments to purchase additional ordinary shares, rather than receive a cash payment. The DRIP is provided and administered by Barclays’ registrar, Equiniti. Share price Information on the Barclays share price and other share price tools are available at: home.barclays/investorrelations + Further details regarding the DRIP can be found at home.barclays/dividends and shareview.co.uk/info/drip Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial information Shareholder information (continued) Shareholder security Shareholders should be wary of any cold calls with an offer to buy or sell shares. Fraudsters use persuasive and high pressure techniques to lure shareholders into high-risk investments or scams. You should treat any unsolicited calls with caution. Please keep in mind that firms authorised by the Financial Conduct Authority (FCA) are unlikely to contact you out of the blue. You should consider getting independent financial or professional advice from someone unconnected to the respective firm before you hand over any money. Report a scam If you suspect that you have been approached by fraudsters please tell the FCA using the share fraud reporting form at fca.org.uk/scams. You can also call the FCA Helpline on 0800 111 6768 or through Action Fraud on 0300 123 2040. Donations to charity We launched a Share Dealing Service in October 2017 aimed at shareholders with relatively small shareholdings for whom it might otherwise be uneconomical to deal. One option open to shareholders was to donate their sale proceeds to ShareGift. As a result of this initiative, £75,452.72 was donated in 2023, taking the total donated since 2017 to over £336,200. Managing your shares online Shareview Barclays shareholders can go online to manage their shareholding and find out about Barclays performance by joining Shareview. Through Shareview, you: • will receive the latest updates from Barclays direct to your email • can update your address and bank details online • can vote in advance of general meetings. To join Shareview, please follow these two easy steps: Step 1 Go to portfolio.shareview.co.uk Step 2 Register for electronic communications by following the instructions on screen Returning funds to shareholders Over 60,000 shareholders did not cash their Shares Not Taken Up (SNTU) cheque following the Rights Issue in September 2013. In 2023, we continued the tracing process to reunite these shareholders with their SNTU monies and any unclaimed dividends and by the end of the year, we had returned approximately £32,000 to our shareholders, in addition to the approximately £5.0m returned since 2015. Useful contact details Registrar Holders of ordinary shares The Barclays share register is maintained by Equiniti. If you have any questions about your Barclays shares, please contact Equiniti: By phone: + 44 (0)371 384 2055 (UK & International telephone number) +44 (0)371 384 2255 (for the hearing impaired in the UK and international) Note: Lines open 8.30am to 5.30pm (UK time) Monday to Friday, excluding public holidays. Visit online: shareview.co.uk By post: Aspect House Spencer Road, Lancing, West Sussex BN99 6DA To find out more, contact Equiniti or visit: home.barclays/dividends Alternative formats Shareholder documents can be provided in large print, audio CD or Braille free of charge by calling Equiniti. +44 (0)371 384 2055 (UK and International telephone number) Barclays PLC Annual Report 2023 57 Holders of American Depositary Receipts (ADRs) ADRs represent the ownership of Barclays PLC shares which are traded on the New York Stock Exchange. ADRs carry prices, and pay dividends, in US dollars. If you have any questions about your Barclays ADRs, please contact Shareowner Services: By email: StockTransfer@equiniti.com Visit online: adr.com By phone: +1 800 990 1135 (toll free in the US and Canada) +1 651 453 2128 (outside the US and Canada) By post: Shareowner Services, PO Box 64504, St Paul, MN 55164-0504, USA Delivery of ADR certificates and overnight mail: By post: Shareowner Services, 1110 Centre Point Curve, Suite 101, Mendota Heights, MN 55120-4100, USA Qualifying US and Canadian resident ADR holders should contact Shareowner Services for further details regarding the DRIP. Shareholder Relations If you have any questions for Barclays about your shareholding, please contact: By email: privateshareholderrelations@barclays.com By post: Shareholder Relations Barclays PLC, 1 Churchill Place, London, E14 5HP Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial information Barclays PLC Annual Report 2023 58 Important Information Forward looking statements This document contains certain forward-looking statements within the meaning of Section 21E of the US Securities Exchange Act of 1934, as amended, and Section 27A of the US Securities Act of 1933, as amended, with respect to the Group. Barclays cautions readers that no forward-looking statement is a guarantee of future performance and that actual results or other financial condition or performance measures could differ materially from those contained in the forward-looking statements. Forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements sometimes use words such as ‘may’, ‘will’, ‘seek’, ‘continue’, ‘aim’, ‘anticipate’, ‘target’, ‘projected’, ‘expect’, ‘estimate’, ‘intend’, ‘plan’, ‘goal’, ‘believe’, ‘achieve’ or other words of similar meaning. Forward-looking statements can be made in writing but also may be made verbally by directors, officers and employees of the Group (including during management presentations) in connection with this document. Examples of forward-looking statements include, among others, statements or guidance regarding or relating to the Group’s future financial position, business strategy, income levels, costs, assets and liabilities, impairment charges, provisions, capital leverage and other regulatory ratios, capital distributions (including policy on dividends and share buybacks), return on tangible equity, projected levels of growth in banking and financial markets, industry trends, any commitments and targets (including environmental, social and governance (ESG) commitments and targets), plans and objectives for future operations and other statements that are not historical or current facts. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Forward-looking statements speak only as at the date on which they are made. Forward-looking statements may be affected by a number of factors, including, without limitation: changes in legislation, regulations, governmental and regulatory policies, expectations and actions, voluntary codes of practices and the interpretation thereof, changes in International Financial Reporting Standards and other accounting standards, including practices with regard to the interpretation and application thereof and emerging and developing ESG reporting standards; the outcome of current and future legal proceedings and regulatory investigations; the Group’s ability along with governments and other stakeholders to measure, manage and mitigate the impacts of climate change effectively; environmental, social and geopolitical risks and incidents, pandemics and similar events beyond the Group’s control; the impact of competition in the banking and financial services industry; capital, liquidity, leverage and other regulatory rules and requirements applicable to past, current and future periods; UK, US, Eurozone and global macroeconomic and business conditions, including inflation; volatility in credit and capital markets; market related risks such as changes in interest rates and foreign exchange rates; reforms to benchmark interest rates and indices; higher or lower asset valuations; changes in credit ratings of any entity within the Group or any securities issued by it; changes in counterparty risk; changes in consumer behaviour; the direct and indirect consequences of the conflicts in Ukraine and the Middle East on European and global macroeconomic conditions, political stability and financial markets; political elections; developments in the UK’s relationship with the European Union (EU); the risk of cyberattacks, information or security breaches, technology failures or other operational disruptions and any subsequent impacts on the Group’s reputation, business or operations; the Group’s ability to access funding; and the success of acquisitions, disposals and other strategic transactions. A number of these factors are beyond the Group’s control. As a result, the Group’s actual financial position, results, financial and non-financial metrics or performance measures or its ability to meet commitments and targets may differ materially from the statements or guidance set forth in the Group’s forward-looking statements. In setting its targets and outlook for the period 2024-2026, Barclays has made certain assumptions about the macro-economic environment, including, without limitation, inflation, interest and unemployment rates, the different markets and competitive conditions in which Barclays operates, and its ability to grow certain businesses and achieve costs savings and other structural actions. Additional risks and factors which may impact the Group’s future financial condition and performance are identified in the description of material existing and emerging risks beginning on page 258 of this Annual Report. Subject to Barclays PLC’s obligations under the applicable laws and regulations of any relevant jurisdiction (including, without limitation, the UK and the US) in relation to disclosure and ongoing information, we undertake no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Climate and Sustainability report The Climate and Sustainability report forms Part 2 of the Barclays PLC 2023 Annual Report. Parts 1, 2 and 3 together comprise Barclays PLC's annual accounts and report for the purposes of Section 423 of the Companies Act 2006. TCFD Strategy Recommendation A TCFD Strategy Recommendation B TCFD Strategy Recommendation C Describe the climate-related risks and opportunities the organisation has identified over the short, medium, and long term. Describe the impact of climate-related risks and opportunities on the organisation’s businesses, strategy, and financial planning. Describe the resilience of the organisation’s strategy, taking into consideration different climate- related scenarios, including a 2°C or lower scenario. Risks and opportunities Risks Opportunities 66 67 70 Implementing our Climate Strategy Achieving net zero operations Operational footprint dashboard All other narrative Reducing our financed emissions BlueTrack dashboard TM All other narrative Financing the transition Sustainable finance dashboard All other narrative Working with our clients Embedding climate and sustainability into our business Just transition and nature and biodiversity Engaging with industry Barclays' approach to public policy Resilience of our strategy Scenario analysis Barclays’ resilience to climate scenarios Climate stress tests 2023 Enhancements and beyond Challenges and limitations Macro-dependencies and objectives Important information/disclaimers 130 131 132 132 134 135 136 137 72 73 75 76 80 88 89 101 103 104 107 121 124 126 129 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays’ climate strategy A strategy for a better financial future Barclays’ climate strategy 1 Achieving net zero operations 2 Reducing our financed emissions 3 Financing the transition Barclays is working to reduce its Scope 1, Scope 2 and Scope 3 operational emissions consistent with a 1.5°C aligned pathway, and counterbalance any residual emissions. Barclays is committed to aligning its financing with the goals and timelines of the Paris Agreement, consistent with limiting the increase in global temperatures to 1.5°C. Barclays is helping to provide the green and sustainable finance required to transform the economies, customers and clients we serve. Our strategy is underpinned by the way we assess and manage our exposure to climate-related risk Barclays PLC Annual Report 2023 60 Our climate strategy is driven by consideration of relevant risks and opportunities and in alignment with our Purpose: working together for a better financial future for our customers, clients and communities. We have a clear shareholder endorsed climate strategy to achieve our ambition of being a net zero bank by 2050, by achieving net zero operations, reducing our financed emissions and financing the transition. We are committed to achieving net zero operations and have continued to make progress, achieving a Δ 51% reduction of Scope 1 and 2 location-based greenhouse gas emissions milestone ahead of Δ schedule. We continued to source 100% renewable electricity for our global real estate portfolio and met our 90% Scope 1 and 2 market- based emissions reduction target – reducing these Δ . emissions by 93% We are also committed to reducing our financed emissions, those deriving from the activities of the clients that we finance and those generated in their respective value chains, by providing financial advice and support as they transition to a low-carbon economy. We have now set 2030 emissions reduction targets for eight of the highest-emitting sectors in our portfolio: Energy, Power, Cement, Steel, Automotive manufacturing, Aviation, Agriculture and Commercial Real Estate; and have assessed the baseline and convergence point for our UK Housing portfolio. This meets our commitment under the NZBA to set targets for material high- emitting sectors in our portfolio. Our 2030 target-setting includes the integration of o 1.5 C aligned scenarios, such as the IEA Net Zero 2050 scenario, in our financed emission targets, and includes ranges for certain sectors to reflect dependencies outside our control that will determine how quickly our financed emissions can be reduced in these sectors. This year, we have further extended the scope of our calculations to cover the full in-scope balance sheet financed emissions, largely aligned to the PCAF Standard. We used our methodology for measuring our financed emissions and tracking them at a portfolio level against the goals and timelines of the Paris Agreement – this methodology is called BlueTrack™. Capital is critical for a successful energy transition and we are focusing our financing to those clients actively engaged in the energy transition. The scale of our business gives us the opportunity to help finance the energy transition – to use our global reach, products, expertise and position in the global economy to work with our clients, including those in the Energy sector, as they transition to a low-carbon business model. To reduce reliance on fossil fuels the world needs to accelerate and scale the supply and capacity of renewables and climate tech solutions that will help to decarbonise high-emitting activities. The Climate Policy Initiative estimates that this requires at least 1 $4.3trillion of climate finance a year by 2030 . Notes: Δ 2023 data subject to independent limited assurance under ISAE (UK)3000 and ISAE 3410. Current limited assurance scope and opinion can be found within the ESG Resource Hub: home.barclays/sustainability/esg-resource-hub/reporting-and- disclosures/ 1 Climate Policy Initiative - Global Landscape of Climate Finance: A Decade in Data climatepolicyinitiative.org/wp-content/ uploads/2022/10/Global-Landscape-of-Climate-Finance-A- Decade-of-Data.pdf Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays’ climate strategy (continued) Barclays is committed to help finance the energy transition, In 2022 we set a target to facilitate $1trn of Sustainable and Transition Financing between 2023 and the end of 2030. Δ of During 2023, we facilitated $67.8bn sustainable and transition financing. $67.4bn was Δ sustainable financing and $0.4bn was transition financing that qualified against our new Transition Finance Framework. We are also focused on investing and scaling the climate tech – hydrogen, carbon capture, batteries, amongst others – needed by society and our clients to transition, generate economic growth and create a new wave of green jobs. To support this, we have a mandate to invest up to £500m of Barclays’ own capital by the end of 2027 and we have invested £138m into 21 innovative companies to date. An important lever for reducing our financed emissions is our policy. In February 2024, we updated our Climate Change Statement with new restrictions on financing upstream oil and gas, including unconventional oil and gas and additional Enhanced Due Diligence (EDD) requirements for biomass. Fossil fuels are still required for many essential activities – including electricity generation, transport and heating. In the International Energy Agency NZE scenario, new long lead time upstream oil and gas projects are not required on a 1.5°C-aligned pathway. For current and future (declining) global demand to be satisfied, investment is needed to support existing assets, 2 while clean energy is scaled . Barclays understands the critical importance of energy being secure, reliable and affordable for our customers and clients. Barclays will continue to support an energy sector in transition, focusing on the diversified energy companies investing in low carbon and with greater scrutiny on those engaged in developing new oil and gas projects. The trajectory for our clients’ transition to a low- carbon economy is influenced by a number of external factors, including market developments, technological advancement, the public policy environment, geopolitical developments and regional variations, behavioural change in society and the scale of change needed to adapt their business models. Client transition pathways will vary, even within the same sectors and geographies. Many highly carbon-intensive sectors require finance to transition to a low carbon economy. Restricting the flow of capital to these sectors could be harmful to the pace of the transition, limiting the real terms impact on global warming. The energy companies unable or unwilling to reduce their emissions or play a role in the energy transition may find it increasingly difficult to access financing from Barclays. We are committed to continuing the work we began in 2020. Our climate strategy will continue to evolve and adapt in light of the rapidly changing environment and the need to support governments and clients, in our efforts to meet our ambition of being a net zero bank by 2050. Notes: Δ 2023 data subject to independent limited assurance under ISAE (UK) 3000 and ISAE 3410. Current limited assurance scope and opinion can be found within the ESG Resource Hub: home.barclays/sustainability/esg-resource-hub/reporting-and- disclosures/ 2 International Energy Agency - Net Zero Roadmap, 2023 Update iea.blob.core.windows.net/ assets/9a698da4-4002-4e53-8ef3-631d8971bf84/ NetZeroRoadmap_AGlobalPathwaytoKeepthe1.5CGoalinReach -2023Update.pdf + Please see the Barclays Climate and Sustainability report from page 60 for further details on Barclays' ambition to be a net zero bank. Barclays' climate, sustainability, and ESG-related data, targets and progress can be found within the ESG Data Centre within our ESG Resource Hub. Further details on our BlueTrackTM methodology can be found within our Financed Emissions Methodology paper (published in 2024) accessible at: home.barclays/ sustainability/esg-resource-hub/reporting-and- disclosures/ Barclays PLC Annual Report 2023 61 Collaborating with the Transition Plan Taskforce The Transition Plan Taskforce (TPT) was launched by HM Treasury in March 2022 with a mandate to bring together leaders from industry, academia, and regulators to develop good practice for transition plan disclosures for the finance sector and the real economy. Barclays participated in a number of working groups for the TPT, including inputting into the Banks Sector Guidance – which adds further depth and detail for preparers of transition plans operating in the banking sector. Barclays contributed to the development of the additional guidance, sharing its views on particular nuances of transition planning for banks – including the incorporation of nature and just transition elements. The guidance was published for consultation in October 2023, with Barclays participating in the launch event. Further details can be found at: + transitiontaskforce.net/wp-content/uploads/2023/11/TPT-Banks-Sector- Guidance.pdf Our approach to TPT disclosures Over 2023, Barclays participated in a number of working groups of the Transition Plan Taskforce (TPT), supporting the development of its framework for transition plan disclosures. We are developing our approach to the TPT’s recommendations, taking into account relevant guidance as it develops, and elements of the TPT’s Disclosure Framework (including the Implementation Guidance and draft Banks Sector Guidance) are addressed in our climate related disclosures included in this Annual Report. During 2024, we will look to further develop elements of our climate disclosures including transition planning. This will be reflected in future disclosures, as we work towards publishing our own transition plan. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays’ climate strategy (continued) Barclays PLC Annual Report 2023 62 Our strategy, selected targets and progress The table below sets out selected targets and policies we have previously announced, progress against them, as well as new announcements as of the publication of this Annual Report. Strategic pillar Previously Announced Target/Policy Progress New Announcement By end 2025 Energy 1Achieving net zero operations • 100% renewable electricity sourcing for our global real 100% Δ sourced estate portfolio by end of 2025 2023 performance We are working towards the following milestones N/A N/A Reduction of GHG emissions • 90% reduction in Scope 1 and 2 GHG emissions (market-based, against a 2018 baseline) Δ reduction -93% By the end of 2030 Cumulative change By the end of 2030 2Reducing our financed emissions Portfolio reduction targets/ convergence point 1 Energy 1 Power 1 Cement 1 Steel Automotive 1 manufacturing 1 UK Housing • 40% reduction in absolute CO2e emissions against Δ MtCO2e (Scopes 1, 2 & 3) a 2020 baseline of 75.4 • 50-69% reduction in CO2e emissions intensity against Δ kgCO2e/MWh (Scope 1) a 2020 baseline of 326 • 20-26% reduction in CO2e emission intensity against Δ tCO2e/t (Scopes 1 & 2) a 2021 baseline of 0.626 • 20-40% reduction in CO2e emissions intensity against Δ tCO2e/t (Scopes 1 & 2) a 2021 baseline of 1.945 -44% -26% -8% -16% • 40-64 % reduction in CO2e emissions intensity against Δ gCO2e/km (Scopes 1, 2 & 3) a 2022 baseline of 174.8 0% N/A N/A N/A N/A N/A • Convergence point: 40% reduction in CO2e emissions Δ 2 intensity against a 2022 baseline of 32.0 kgCO2e/m (Scopes 1 & 2) for formerly UK Residential Real Estate UK Commercial Real estate UK Agriculture - Livestock & Dairy Aviation N/A N/A N/A +1% N/A N/A N/A • Convergence point: 40% reduction in CO2e emissions intensity against a 2023 baseline Δ 2 of 32.1 (Scopes 1 & 2) for expanded scope covering social housing and kgCO2e/m business banking real estate Δ 2 kgCO2e/m • 51% reduction in CO2e emissions intensity against a 2023 baseline of 30.0 (Scopes 1 & 2) Δ MtCO2e • 21% reduction in absolute CO2e emissions against a 2023 baseline of 2.4 (Scopes 1, 2 & 3) Δ gCO2e/ • 11-16 % reduction in CO2e emissions intensity against a 2023 baseline of 882 RTK (Scopes 1 & 3) Notes: Δ 2023 data subject to independent limited assurance under ISAE (UK) 3000 and ISAE 3410. Current limited assurance scope and opinions can be found within the ESG Resource Hub for further details: home.barclays/sustainability/esg-resource-hub/reporting-and-disclosures/ 1 Reported values marked with Δ have been re-baselined in the current year. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays’ climate strategy (continued) Barclays PLC Annual Report 2023 63 Strategic pillar Previously Announced Policy New Announcements1 Project level restrictions Entity level restrictions Upstream Oil & Gas N/A 2Reducing our financed emissions 2 Restrictive policies From 9 February 2024: • We will not provide project finance for expansion projects or for infrastructure projects primarily to be used for such expansion projects. • We will not provide other direct financing to Energy Groups for expansion projects or infrastructure projects primarily to be used for such expansion projects. From 9 February 2024: • We will not provide financing to new clients that are Energy Groups where more than 10% of their total planned oil & gas capital expenditure is in expansion. By 1 January 2025: • We expect all Energy Groups to be producing relevant information in relation to their transition plans or decarbonisation strategies. From 1 January 2025: • Any new financing or renewal of existing financing for Non-diversified Groups where more than 10% of their total planned oil & gas capital expenditure is in long-lead expansion would be by exception. From 1 January 2026: • We will only provide financing to Energy Groups if they are able to demonstrate that they are committed to reducing their own emissions by having: – net zero-aligned near-term Scope 1 and 2 emissions reduction targets (absolute or intensity-based); and – targets to reduce methane emissions by 2030, aligned with OGCI, OGMP2.0 or similar industry guidance; and – a commitment to end all routine / non-essential venting and flaring by 2030. Unconventional Oil & Gas • Existing project and entity level restrictions on unconventional oil & gas (including Arctic Circle oil & gas, Hydraulic Fracturing and Oil Sands) remain in place. From 9 February 2024: • We will not provide direct financing to Energy Groups for any oil & gas projects in the Amazon Biome, or any oil & gas projects involving Ultra-Deep Water and/or Extra Heavy Oil, or infrastructure projects primarily to be used for such oil & gas projects. From 30 June 2024: • We will not provide financing to Energy Groups whose aggregate share of production in Oil Sands, Extra Heavy Oil, Hydraulic Fracturing in the UK/EU, and Arctic Circle oil & gas exceeds 20% of their total oil & gas production. • We will not provide financing to Clients engaged in exploration, appraisal, development, and production of oil & gas in the Amazon Biome. Thermal Coal Mining • Existing project and entity level restrictions on thermal coal mining remain in place. Thermal Coal Power • Existing project and entity level restrictions on thermal coal-fired power remain in place. From 9 February 2024: • No project finance for greenfield development or material expansion of thermal coal mines anywhere in the world, including captives. (Note: this was an update to an existing restriction to include captives) • No project finance for development of infrastructure projects primarily to be used for thermal coal mines anywhere in the world. From 9 February 2024: • No project finance to enable construction or material expansion of thermal coal-fired power plants anywhere in the world, including captives. (Note: this was an update to an existing restriction to include captives) Notes: 1 For details on the exact scope and application of these restrictions please refer to the Climate Change Statement found at: home.barclays/sustainability/esg-resource-hub/statements-and-policy-positions/ 2 Words in italics are defined in the Climate Change Statement found at: home.barclays/sustainability/esg-resource-hub/statements-and-policy-positions/ Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays’ climate strategy (continued) Barclays PLC Annual Report 2023 64 Strategic pillar Previously Announced Target/Policy Previously Announced Target 3Financing the transition Sustainable financing • Facilitate $1trn of Sustainable and Transition Financing between 2023 and end of 2030 • Facilitate £100bn of green financing between 2018 and 2030 Progress 2023 performance Δ • $67.8bn Δ Δ ) (Cumulative performance: £113.7bn • £25.9bn Sustainable Impact Capital • Increase mandate to invest up to £500m of Barclays' capital in global climate tech start-ups by the end of 2027 • £49.49m (£138.4m invested by the end of 2023) Δ 2023 data subject to independent limited assurance under ISAE (UK) 3000 and ISAE 3410. Current limited assurance scope and opinions can be found within the ESG Resource Hub: home.barclays/sustainability/esg-resource-hub/reporting-and-disclosures/ Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays’ climate strategy (continued) Climate Action Roadmap Barclays PLC Annual Report 2023 65 Barclays has been taking action on climate change for a number of years. The below roadmap highlights key targets, actions and policies relating to achieving net zero operations, reducing our financed emissions and financing the transition. These are key milestones on the way to achieving our ambition to be a net zero bank by 2050. • Announced 2025 £150bn social and environmental financing target and 2030 £100bn green financing target • One of the first UK banks to launch a 'Green Home Mortgage' • Announced targets to reduce operational emissions by 80% and procure 90% 4 renewable energy by 2025 • Announced ambition to be a net zero bank by 2050 • Launched BlueTrack™ with 2025 Energy and 6 Power targets • Launched £175m 8 Sustainable Impact Capital initiative • Announced 2030 Energy, Power, Cement and 6 Steel targets • Announced $1tn Sustainable and Transition Financing 8 target and increased SIC mandate to invest up to £500m • Announced new operational emissions and electricity 4 sourcing targets • Elevated Climate risk to a Principal Risk • Held a ‘Say on Climate’ advisory vote • Updated Climate Change Statement with new financing restrictions for 3 upstream oil and gas • Announced 2030 targets for Agriculture, Commercial Real Estate, and Aviation, and updated scope for 7 UK Housing convergence 6 and EPC ambition point • Estimated full in-scope balance sheet financed emissions using methodology developed 11 10 using PCAF Standard • Minimum requirements for Scope 1 and 2 targets, methane abatement and venting/flaring for Energy 3 Groups will come into effect • All financing to thermal coal mining or coal-fired power generation clients will be 3 phased out Pre- 2018 2018 2019 2020 2021 2022 2023 2024 2025 2026 2030 2035 2050 • Joined Paris Pledge for Action in 2015 • Signed statement of 1 support of the FSB’s 2 in 2017 TCFD 5 pilot • Joined PACTA • Published Climate Change 3 setting Statement out restrictions for sensitive sectors Notes: • Founding member of 9 the NZBA • Exceeded target to facilitate £150bn of social, environmental and sustainability-linked financing by 2025 • Exceeded 2025 operational emissions and energy 4 targets • Announced 2030 Autos target, convergence point for UK 7 and ambition for Housing 50% of mortgages to have 6 EPC C or better by 2030 • Expanded our net zero operations approach and announced new operational 4 milestones • Exceeded target to facilitate £100bn of green financing by 2030 • Financing restrictions came into effect for certain thermal coal mining, coal 3 power and oil sands clients • NZ ambition • Tightened financing restrictions for coal-fired power generation clients will 3 come into effect • Transition plan expectations for Energy Groups will come 3 into effect • Financing to thermal coal mining or coal-fired power generation clients in the EU and OECD will be phased 3 out • Financing to clients with >10% revenue from thermal coal mining or coal-fired power generation in the RoW will be 3 restricted 1 Financial Stability Board | 2 Taskforce on Climate-related Financial Disclosures | 3 See our Climate Change Statement updated in February 2024 for further details including on scope and definition | 4 See section on Net Zero Operations | 5 Paris Agreement Capital Transition Assessment | 6 See section Reducing our financed emissions | 7 Originally called Residential Real Estate, updated in 2024 | 8 Sustainable Impact Capital | 9 Net-Zero Banking Alliance | 10 Partnership for Carbon Accounting Financials | 11 PCAF Standard - PCAF (2022). The Global GHG Accounting and Reporting Standard Part A: Financed Emissions. Second Edition. Risk and opportunities TCFD Strategy Recommendation A: TCFD Strategy Recommendation B: TCFD Strategy Recommendation C: Describe the climate-related risks and opportunities the organisation has identified over the short, medium, and long term. Describe the impact of climate-related risks and opportunities on the organisation’s businesses, strategy, and financial planning. Risks and opportunities Risks Opportunities 66 67 70 Implementing our climate strategy Achieving net zero operations Operational footprint dashboard All other narrative Reducing our financed emissions BlueTrack dashboard TM All other narrative Financing the transition Sustainable finance dashboard All other narrative Working with our clients Embedding climate and sustainability into our business Just transition and nature and biodiversity Engaging with industry Barclays' approach to public policy Describe the resilience of the organisation’s strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario. Resilience of our strategy Scenario analysis Barclays’ resilience to climate scenarios Climate stress tests 2023 Enhancements and beyond Challenges and limitations Macro-dependencies and objectives Important information/disclaimers 130 131 132 133 134 135 136 137 72 73 75 76 80 88 89 101 103 104 107 121 124 126 129 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 67 Risk and opportunities TCFD Strategy Recommendation (a) Climate-related risks identified over the short, medium and long term Our climate strategy is underpinned by the way we assess and manage our exposure to climate-related risks. Climate risk is a Principal Risk within the Barclays Enterprise Risk Management Framework. Barclays faces exposure to climate-related risks either directly through its operations and infrastructure or indirectly through its financing and investment activities. The two main categories of climate-related risks are physical risks and transition risks. Physical risks Physical risks result from a changing climate and can be event-driven (acute risks), including increased frequency and/or severity of extreme weather events such as cyclone, hurricanes and flooding. Physical risks can also be driven by longer-term shifts in climate patterns (chronic risks) from sustained higher temperatures, leading to rising sea levels, rising mean temperatures and more severe weather events. Transition risks Transition risks result from the transition to a lower-carbon economy. This is likely to involve significant, rapid policy, regulatory and legal changes, as well as the evolution of technology and markets to adapt to a changing climate and associated impacts. Time horizons The impact of physical and transition risks can be significant and widespread, affecting Barclays' portfolio and financial performance over short-, medium- and long-terms horizons. In the short term, physical risks arising from extreme weather events and climate-related disasters pose a direct threat to Barclays' physical assets and infrastructure. This can potentially result in immediate losses, increased costs for repair and higher insurance premiums. Similarly, acute events may also potentially damage the physical facilities of Barclays' clients or cause business disruptions, which may adversely impact the value of clients' assets, reduce their profitability and subsequently lead to potential increase in credit risk for Barclays. Additionally, operations in regions prone to high physical risks may also experience higher insurance premiums or limited insurance coverage. Transition risks are expected to occur in all timeframes, but more broadly over the medium term. The cost of transitioning to cleaner technologies and sustainable business practices may strain the financial resources of businesses, affecting profitability and long-term viability. Financial institutions like Barclays could also face significant increases in costs and resources allocated to adhere to new policies, laws and regulations aimed at transitioning to a lower- carbon economy. This in turn may lead to higher conduct and operational risks to Barclays. At an individual level, there may be challenges related to employment opportunities as businesses transition away from carbon-intensive practices. This in turn may impact the creditworthiness of Barclays' clients and their ability to repay loans. Transition risks aimed at mitigating climate change can also impact the profitability and value of assets in Barclays' portfolio, particularly those linked to carbon-intensive industries. Companies perceived as slow to adapt or unresponsive to environmental concerns may face reputational damage or legal actions leading to decreased customer trust and investor support. With escalating concerns and heightened global awareness of climate risks, it is likely that litigation linked to these risks will increase. Additionally, Barclays may face greater scrutiny of the type of business it conducts – including in the form of adverse media coverage and an increase in climate-related litigation cases. This in turn may adversely impact customer demand for Barclays' products, returns on business activities, value of assets and trading positions, resulting in higher impairment charges. Looking to the longer term, the cumulative effects of global temperature rise are likely to become increasingly pronounced – influencing ecosystems, sea levels and societal structures. Climate change can also trigger tipping points through feedback loops that amplify its effects. Certain tipping points are already underway, manifesting in observable changes across the globe. Different tipping elements, such as the melting of ice sheets or changes in ocean circulation, have varying time horizons. As the science develops, we are observing that some tipping points may run on a shorter timeline than initially expected. Accordingly, the uncertainty of exact timeframes in which such tipping points are expected to materialise adds a layer of complexity – making it challenging to precisely predict when impacts will materialise. When considering the timescales of climate- related risks, Barclays has categorised short, medium and long term as follows: • Short term (S): 0-1 year • Medium term (M): 1-5 years • Long term (L): 5-30 years. The short-term timescale coincides with the short-term plan for annual budgets and granular financial plans. The medium term coincides with the five-year financial, capital and funding plans. Climate change as a driver of risk The feedback effects of climate risk drivers through macro and micro transmission channels are observed in Barclays' portfolio through traditional risk categories such as credit risk, market risk, treasury and capital risk, operational risk and reputational risk. The approach to identifying, measuring and managing climate- related risks is consistent with other key risks, however there remains significant uncertainty around when these risks will materialise. Climate risk is integrated into the broader Enterprise Risk Management Framework, aligning with other Principal Risks and ensuring a holistic approach to risk identification, assessment and management. Barclays' Climate Risk Framework facilitates a structured integration of climate risk considerations into the Bank's operations. It undergoes regular reviews and updates – including changes to risk taxonomy, definitions and methodology – to align with changing regulatory expectations and external developments. Following the annual review of the Climate Risk Framework in 2023, Barclays no longer considers that a separate category is needed to capture second-order impacts of physical and transition risk, as these impacts are already being captured and managed within the existing assessments and framework. Therefore, connected risks no longer features as a separate category. The potential impacts of physical and transition risk drivers will vary across Barclays' portfolios depending on composition, industry, geographic location, business operations and other contextual factors. The tables below set out the example drivers, example potential impacts and expected time horizons of various physical and transition risks. Further details on how Barclays manages climate risk can be + found on pages 272 to 276. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Risk and opportunities (continued) Barclays PLC Annual Report 2023 68 TCFD Strategy Recommendation (a) Transition risks Example drivers Example potential impacts Expected time horizons Physical risks Example drivers Policy and legal Reputation Technology Market • Carbon tax impacting sectors and clients • • Enhanced GHG reporting obligations • Government and non-governmental organisations taking litigation actions Increased stakeholder concern or negative stakeholder feedback • Shifts in consumer preferences • Stigmatisation of sectors • Disruptive substitute technologies being • Changes in supply and demand of raw favoured because of lower carbon footprint • Development of emissions capture and recycling facilities • Investments in new technologies materials • Uncertainty in market signals • Changing market sentiment • Increased operating costs for compliance or due to fines from regulators or damages from litigation • Write-offs and early retirement of assets due to policy changes • Changes in asset valuations • Increased costs and reduced demand for products and services • Write-offs and early retirement of assets • Research and development expenditure • Decreased production capacity due to poor employee attraction and retention in new technologies • Costs for adoption of new practices and • Reduction in capital availability processes • • Increased costs and reduced demand for products and services Increased production costs due to changing input prices and output requirements • Decreased revenue and repricing of assets S, M, L Acute Chronic • Damage to fixed assets and infrastructure (e.g. property, power supplies) by wildfires • Change in weather and precipitation patterns resulting in reduced agricultural yields and • Adverse impact on agriculture and production of soft commodities due to drought • Transport difficulties and damage to infrastructure due to severe storm and flooding land no longer suitable for farming • Potential population migration due to uninhabitable land Example potential impacts • Increased costs due to damage to facilities • Increase in sea levels and consequent coastal erosion requiring building of new seawall and flood defences • Rising temperatures resulting in diminished productivity and health issues • Reduced revenue from decreased production capacity and early retirement of assets • Reduced revenue from decreased production capacity • Decrease in property values • Increased operating costs and decrease in sales due to unavailability of raw materials and supply chain disruptions • Increased costs and insurance for assets in high-risk locations • Reduced revenue from lower sales and output Expected time horizons S, M, L M, L Barclays PLC Annual Report 2023 69 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Risk and opportunities (continued) TCFD Strategy Recommendation (a) i Building our understanding of nature-related risk i Nature-related risks arise from an organisation's dependencies and impacts on nature. These risks can be physical risks and transition risks, which in 1 . turn can present financial risks As such, this year we have undertaken further work to develop our understanding of nature-related risks and how these relate to different industry sectors. Building on last year's heatmap analysis, we have updated our approach using publicly available data and explored a wider set of impacts and dependencies. This work has been designed to help build our understanding of the material nature- related impacts, dependencies, risks and opportunities within priority industry sectors, and indicate where we might focus further analysis, as we continue to build our nature related assessment and decision-making capabilities. Through this work, we have developed an updated heatmap by mapping industry classification codes and the associated qualitative nature-related 2 impact and dependency ratings from ENCORE 3 and SBTN to Barclays' internal sector classifications. The mapping was undertaken for sectors with material impacts and dependencies as identified by TNFD in its Guidance for Financial 4 . Institutions We then undertook an exploratory exercise which highlighted in which of these industry sectors particular nature-related impacts and dependencies are most likely to occur. This work created a heatmap with ratings representing an average global view of the potential impacts and dependencies that may be associated with the direct operations of companies in these sectors. The preliminary heatmap analysis highlighted that, for most of the priority industry sectors, there are a number of potential impacts and dependencies rated as high or very high, including impacts related to land-use change, water use and pollution, as well as dependencies on ecosystem services such as ground and surface water, climate regulation and flood-storm protection. These insights will be used to help inform our future analysis, taking into account that this represents one data source, and specific nature related risks within the same sector might vary substantially from company or project and an aggregated heatmap is not necessarily representative of the actual impacts and dependencies of Barclays’ client base. Our proposed next steps include building on the TNFD LEAP pilot undertaken in 2022/2023 to conduct further sector-level analysis, taking into account the results of the heatmap, Barclays’ exposure and client base and emerging thinking on impact and risk data and methodologies. Notes: 1 Source: tnfd.global/wp-content/uploads/2023/08/Recommendations_of_the_Taskforce_on_Nature- related_Financial_Disclosures_September_2023.pdf?v=1695118661 2 ENCORE stands for Exploring Natural Capital Opportunities, Risks, and Exposure and is a tool developed by Global Economy, UNEP-FI, and UNEP- WCMC. 3 SBTN stands for Science Based Targets Network and builds on the momentum of the Science Based Targets initiative helping companies set science-based targets for nature. 4 Source: tnfd.global/wp-content/uploads/2023/08/Guidance_for_Financial_Institutions_v1.pdf Nature-related data, models and methodologies are a nascent area and therefore evolving and reliant on externally sourced data mapped to internal sector identifiers, with various limitations. We will continue to review the applied data, models, and methodologies, as such the results of similar assessments are likely to change in the future. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 70 Risk and opportunities (continued) TCFD Strategy Recommendation (a) Climate-related opportunities identified over the short, medium and long term Barclays has enhanced its focus on sustainable and transition finance over the last two years. At the end of 2022, we announced a new target to facilitate $1trn of Sustainable and Transition Finance. This followed a review of the financing requirements arising from the global transition to a low-carbon economy if the world is to avoid the worst effects of climate change and the potential addressable market for Barclays. During 2023 we built on this work to develop a Group-wide sustainable finance strategy to operationalise our ambition. The market opportunity We recognise the opportunities arising from the global transition to a low-carbon economy – which will involve scaling up zero or near-zero emitting technologies and businesses and supporting emissions reductions in high-emitting and hard-to-abate sectors if the world is to avoid the worst effects of climate change. In 2022, we completed a review of the market and identified three medium-term thematic areas of potential opportunity for Barclays, as outlined below. Although markets may have evolved during 2023 we believe these still represent growth opportunities for Barclays. Energy Transition Finance The analysis indicated that, based on current policy, technology and market developments, Energy Transition Finance – including renewables and nascent or early-stage climate technologies that are needed to scale to support the transition to net zero – represents an estimated 10-year addressable opportunity of over $16trn across North America, Europe and Asia Pacific (excluding China). This extends to up to $24trn over the same time period if policy, technology and market developments step up to deliver on net zero by 2050. This consists of a number of mature and scaling technologies with renewable energy (including wind and solar) and low-emissions transport (including electric vehicles, fuel cell electric vehicles and mass transit) expected to make up over half of the addressable market through to 2030. The analysis also indicated significant longer-term opportunities in financing the scaling of capabilities in nascent technologies such as carbon capture utilisation and storage (CCUS) and hydrogen solutions. Sustainable finance instruments Sustainable finance instruments represent an estimated $3.5trn-6trn annual issuance opportunity through to 2030 across North America, Europe and Asia Pacific (excluding China), with Europe expected to remain the primary market for ESG debt. The analysis indicated that all ESG instruments are expected to grow to 2030 with ESG debt excluding green bonds and loans represents an estimated 10-year $400-650bn cumulative financing opportunity for Barclays based on our global market share in sustainable finance instruments. Retail and business banking Barclays UK recognises the environmental and societal benefits – and the commercial opportunities – that can be delivered through financing the UK economy's transition to net zero. Embracing the challenge of capturing opportunities from the transition to a low-carbon economy aligns with Barclays’ Purpose and positions us to capitalise on the growing market for sustainable finance. Our 2022 market review indicated that, within the UK, sustainable opportunities in retail and business banking represent a $225-286bn market opportunity by 2025, increasing to an estimated $640bn-1trn by 2030. According to our 2022 market review, Green Home Mortgages represent the largest individual market for Barclays UK by 2030. We are actively exploring ways to unlock the decarbonisation of homes at scale by developing secured and unsecured lending for energy-efficiency-related technologies. We are also exploring strategic partnerships to provide customers and businesses with financing and guidance to make more sustainable choices. However, there are significant dependencies for this opportunity to be realised – namely customer demand, supply chain maturity and policy intervention. Assessing the market opportunity To determine the addressable global market for sustainable finance to 2030, Barclays' 2022 market review leveraged widely used and credible third-party sources including the IEA, IRENA, Climate Bonds Initiative and the IFC as well as Barclays' own industry, ESG and market research. The analysis considered the investment needed through to 2030 for the world to align to net zero, including the accelerated scenarios reflecting possible policy and market developments. Having determined the global addressable market, Barclays developed scenarios for the Bank's potential market for various asset classes, product sets, technological sectors and geographic markets, validated through comparison with historic growth rates and our projected share of the overall market. $1trn Sustainable and Transition Financing Target Following analysis of the market opportunity for sustainable financing, together with a review of the Group's capabilities, in December 2022 we announced a new target to facilitate $1trn of Sustainable and Transition Financing between 2023 and the end of 2030, + Further details of Barclays' sustainable finance targets can be found on page 101 and further details on how Barclays' products and services are harnessing these opportunities from page 107. We recognise that we must tackle the decarbonisation of 'hard-to-abate' sectors that are carbon intensive – including through scaling and commercialising new technologies such as hydrogen and carbon capture. During 2023 we developed a Transition Finance Framework, which we announced in early 2024. The Transition Finance Framework sets out the criteria for the inclusion of transition financing in our $1trn target. The inclusion of transition financing reflects our recognition of the importance of lending and facilitating funding and investing in technologies and activities that support GHG emission reduction (directly or indirectly) in high-emitting and hard-to-abate sectors. + Further details of Barclays' Transition Finance Framework can be found on page 104. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Risk and opportunities (continued) TCFD Strategy Recommendation (a) Group sustainable finance strategy Following the appointments of the CIB Head of Sustainable Finance in November 2022 and the Barclays UK Head of Social Purpose and Sustainable Finance in January 2023, a significant piece of work was undertaken to develop a Group sustainable finance strategy, which was presented to and discussed with the Board in July 2023. This work built on the findings of the 2022 market opportunity analysis and considered Barclays ' competitive strengths to identify strategic opportunities in sustainable and transition finance where we believe Barclays can differentiate itself and best support our clients and the global economy to accelerate the transition to net zero. The strategy aligns with the climate and environmental themes that were identified when we announced our $1trn Sustainable and Transition Financing target in December 2022 and therefore underpins our plan to deliver that ambition. In the development of the strategy, we identified three sustainability themes which are important in the journey towards a net zero and sustainable future, where we see significant commercial opportunity and where we believe we can focus and differentiate: The graphic below provides a summary of the themes and pillars. At the intersection of each theme and pillar we are developing tailored products and services for our clients and customers to help them deliver on their transition and sustainability objectives. For example, with our focus on climate technologies, we are supporting the development of start-ups in targeted technologies and nature from idea to IPO. We are also advising sustainable and Agtech companies on areas such as raising finance and M&A. 1 Decarbonising industry 2 Contributing to a nature-positive food system 3 Supporting consumers on the path to net zero We also identified three pillars of competitive advantage for Barclays across those sustainability themes, through which we believe we can deliver for our clients by working collectively across our different businesses: 1 Our strength in the UK 2 Our focus on being a leading partner to climate technologies 3 The strength of our business across sustainable credit markets Our strategy to deliver on our sustainable finance ambition Three pillars where we can deliver for clients and stakeholders: Support UK net zero Leading climate tech partner Sustainable credit markets • Facilitate the flow of capital to consumers and businesses • Facilitate the flow of capital to new and existing technologies critical to the net zero transition • Leverage strength in credit markets to facilitate clients’ transition plans • Deliver on our social purpose agenda by • Develop expertise and infrastructure financing • Play a leading role in the creation of carbon and supporting the just transition solutions for the deployment of new technologies biodiversity markets • Support climate tech companies across the lifecycle, • Unlock additional sources of capital, including from startup to IPO through securitisation, savings and investments Three sustainability themes where we can focus and differentiate: Decarbonising industry Support SMEs and corporates across major industries to decarbonise, deploy new technology and manage their transitions Contributing to a nature- positive food system Drive the evolution to sustainable agriculture and foods, and facilitate regenerative land use Supporting consumers on the path to net zero Provide financing to facilitate consumer products to live and act sustainably, and support consumer-oriented climate tech and financing models Barclays PLC Annual Report 2023 71 Through our sustainable finance strategy and our $1trn Sustainable and Transition Financing target, we have set out an ambition and approach that will support our clients and customers in their transition. Delivery of the strategy will require a multi-year investment in our people and capabilities, which we are now accelerating the execution of. Identifying nature-related opportunities Nature-related financing presents future opportunities for the financial sector given the capital requirements to address and reverse nature loss: the biodiversity financing gap is estimated to be $700bn per year1. As we execute our sustainable finance strategy, we aim to identify opportunities to play a role in supporting the financing of nature. See section Financing nature on page 105 for details of our approach. + Note: 1 cbd.int/doc/c/e6d3/cd1d/daf663719a03902a9b116c34/ cop-15-l-25-en.pdf Implementing our climate strategy TCFD Strategy Recommendation A: TCFD Strategy Recommendation B: TCFD Strategy Recommendation C: Describe the climate-related risks and opportunities the organisation has identified over the short, medium, and long term. Describe the impact of climate-related risks and opportunities on the organisation’s businesses, strategy, and financial planning. Risks and opportunities Risks Opportunities 66 67 70 Implementing our climate strategy Achieving net zero operations Operational footprint dashboard All other narrative Reducing our financed emissions BlueTrack dashboard TM All other narrative Financing the transition Sustainable finance dashboard All other narrative Working with our clients Embedding climate and sustainability into our business Just transition and nature and biodiversity Engaging with industry Barclays' approach to public policy Describe the resilience of the organisation’s strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario. Resilience of our strategy Scenario analysis Barclays’ resilience to climate scenarios Climate stress tests 2023 Enhancements and beyond Challenges and limitations Macro-dependencies and objectives Important information/disclaimers 130 131 132 132 134 135 136 137 72 73 75 76 80 88 89 101 103 104 107 121 124 126 129 Barclays PLC Annual Report 2023 73 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 1 Achieving net zero operations Although financed emissions account for the greatest proportion of our climate impact, we have also continued addressing our operational emissions – an important factor in meeting our ambition to be a net zero bank by 2050. Defining net zero operations We define net zero operations as the state in which we will achieve a GHG reduction of our Scope 1, Scope 2 and Scope 3 operational o 1 emissions C-aligned consistent with a 1.5 pathway and counterbalance any residual emissions. We continue to review and develop our approach to net zero operations as standards to understand and define net zero evolve rapidly. Net zero operations strategy Our net zero operations strategy has two components: • Reduce our Scope 1 and 2 emissions through energy efficiency, electrification of our buildings and vehicles, renewable electricity sourcing and replacing fossil-fuel-powered infrastructure with low-emission alternatives • Reduce Scope 3 operational emissions by engaging with our key stakeholders, including 2 suppliers and colleagues, to track, manage and reduce their GHG emissions – while embedding net zero principles across our policies and contractual requirements. Progress to date 3 In 2023 we achieved our milestone of 50% reduction of our Scope 1 and 2 location-based GHG emissions ahead of 2030 – reducing these Δ emissions by 51% . We continued to source 4 Δ 100% for our global real renewable electricity 5 estate portfolio and continued to meet our 90% Scope 1 and 2 market-based emissions 6 – reducing these emissions by reduction target Δ . 93% Key contributors to our progress include global 7 real estate portfolio right-sizing and energy efficiency programmes, as well as company vehicles electrification, and our continued focus on renewable electricity sourcing. For our Scope 3 operational emissions, our focus remained on engaging with our key stakeholders and making data enhancements, particularly by acquiring primary supplier data and evolving our accounting methodology in line with industry standards and best practice. We also continued to pursue the integration of ESG considerations and expectations into processes throughout the procurement lifecycle. We expect that our progress against our net zero operations targets and milestones is likely to be variable and non-linear. Our net zero operations strategy is dependent on broader industry, technological and regulatory changes that are outside Barclays’ control and may affect our ability to achieve our targets and milestones. Further, as the accounting standards and data underlying our net zero operations strategy continue to evolve and be refined, this could impact our metrics, targets and milestones. Progress against our targets and milestones may also be impacted by management decisions based on key drivers unrelated to climate, for example prudent risk management practices. Our intent is to enhance data collection and accuracy to help identify key contributors to our impact, determine opportunities for improvement, and support the integration of sustainability into our business operations. Notes: Δ 2023 data subject to independent limited assurance under ISAE (UK) 3000 and ISAE 3410. Current limited assurance scope and opinion can be found within the ESG Resource Hub: home.barclays/sustainability/esg-resource-hub/reporting-and- disclosures/ 1 We define our Scope 3 operational emissions to include supply chain, waste, business travel and leased assets. 2 In this Achieving net zero operations section, when referring to suppliers and supply chain, we are referring to Third-Party Service Suppliers (TPSPs). 3 In this Achieving net zero operations section, a reference to a "milestone” denotes an indicator we are working towards and report against. 4 We maintained 100% renewable electricity sourcing for our global real estate portfolio through instruments including green tariffs (55%) and energy attribute certificates (EACs)(45%). 5 Global real estate portfolio includes offices, branches, campuses and data centres. 6 In this Achieving net zero operations section, a reference to a “target” denotes an indicator linked to our executive remuneration. 7 By right-sizing, we are optimising our space and associated resources for our operational needs. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 1 Our net zero operations approach Barclays PLC Annual Report 2023 74 By the end of Scope 1 and 2 2022 performance 2023 performance Scope 3 2022 performance 2023 performance 100% renewable electricity sourcing for our global real estate portfolio 100% 2025 90% reduction in our Scope 1 and 2 GHG emissions (market-based against a 2018 baseline) 91% 100% electric vehicles (EV) transition for UK company cars 55% 100% EV or ultra-low emissions vehicles (ULEV) for all company cars 24% 50% reduction in our Scope 1 and 2 GHG emissions (location-based against a 2018 baseline) 43% Δ 100% Δ 93% 88% 42% Δ 51% 2 We intend to work towards the milestone of 115 kWh/ 2 m /year average energy use intensity across our corporate offices 2 of 10 MW We intend to work towards the milestone on-site renewable electricity capacity installed across our portfolio 260 kWh/m 1 2 /year 0.30MW 3 2 /year 228 kWh/m (-27% against 2018 baseline) 0.40MW (<1% total electricity use) 2030 2035 2050 2 of 70% of We intend to work towards the milestone 9 , having science- our suppliers, by addressable spend 4 in place based GHG emissions reduction targets 5 47% 5 57% 2 of 90% of We intend to work towards the milestone 9 , having science- our suppliers, by addressable spend 4 in place based GHG emissions reduction targets 5 47% 2 We intend to work towards the milestone of 50% GHG supply chain emissions reduction (against a 2018 6 ) baseline 6 17% 2 We intend to work towards the milestone of 90% diversion of waste from landfill, incineration and the 7 environment across key campuses 8 49% 2 We intend to work towards the milestone of 90% GHG supply chain emissions reduction (against a 2018 6 ) baseline 6 17% 5 57% 6 28% 53% 6 28% Notes: 1 We have updated internal and external data which has resulted in minor updates to FY2022 EUI performance (a change from 265kWh/m2/year to 260 kWh/m2/year). 2 In this Achieving net zero operations section, a reference to a "milestone” denotes an indicator we are working towards and report against. 3 We have updated internal data which has resulted in minor updates to FY2022 on-site renewable electricity capacity (from 0.26MW to 0.30MW). 4 Targets are considered ‘science-based’ if they are in line with what the latest climate science deems necessary to meet the goals and timelines of the Paris Agreement – limiting global warming to well below 2°C above pre-industrial levels and pursuing efforts to limit warming to 1.5°C. The Science Based Targets initiative (SBTi), a partnership between CDP, the United Nations Global Compact, World Resources Institute (WRI) and the World Wide Fund for Nature (WWF), provides companies with independent assessment and validation of targets and is currently the internationally accepted standard. 5 Indicative number provided to illustrate the number of suppliers by total addressable spend that have committed to or have science-based targets in place. In our 2022 Annual Report we reported 47% progress based on a review of our top 500 suppliers by addressable spend. Our current progress is reported here based on a review of our top 2,000 suppliers by addressable spend. 6 Based on our indicative supply chain emissions inventory. DEFRA conversion factors – which Barclays uses to calculate spend data into supply chain emissions – were revised in 2023. These have been retrospectively applied to Barclays' 2018 baseline and 2022 disclosure, resulting in an increased 2018 baseline and recalculated 2022 metrics. In FY 2022 we reported 8% reduction in our supply chain GHG emissions and due to the changes in the DEFRA conversion factors and updated internal data, we recalculated the 2022 figure to be 17%. As our suppliers continue to develop the quality of emissions data for the goods and services we purchase, our reliance on spend data to calculate our emissions will reduce and the volume of primary data will increase. 7 Campuses include 1 Churchill Place, Radbroke, Northampton, Glasgow, Pune, Whippany, 745 7th Avenue, Dryrock. 8 Reported waste diversion performance for FY2022 has been recalculated from 65% to 49%, to account for an update in external data. 9 Addressable spend is defined as external costs incurred by Barclays in the normal course of business where Procurement has influence over where the spend is placed. It excludes costs such as regulatory fines or charges, exchange fees, taxation, employee expenses or litigation costs, and property rent. Please see ESG Data Centre for all recalculations and ESG Reporting Framework for our operational emissions accounting approach. Δ 2023 data subject to independent limited assurance under ISAE (UK) 3000 and ISAE 3410. Current limited assurance scope and opinions can be found within the ESG Resource Hub: home.barclays/sustainability/esg-resource-hub/reporting-and-disclosures/. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) Operational footprint dashboard 2023 Operational GHG emissions by Scope (market-based) Scope 3 categories Barclays PLC Annual Report 2023 75 market-based 1 Category 1, 2 & 4 supply chain emissions 3 Category 3 fuel and energy-related activities 5 Category 5 waste generated in operations 6 Category 6 business travel 7 Category 8 upstream leased assets 8 Category 13 downstream leased assets 84.9% 2.1% 0.1% 6.1% 4.2% 0.1% Total GHG emissions by Scope (location-based) '000 tonnes CO2e Total GHG emissions by Scope (market-based) '000 tonnes CO2e Total energy use (MWh) 2023 2022 2021 2020 2019 2018 15.3△ 20.2 23.2 22.7 27.3 29.0 n Scope 1 n Scope 2 (location-based) n Scope 3 Notes Δ 735.8 815.8 824.6 220.3 300.0 1019.5 Total 2023 2022 2021 2020 2019 2018 15.3△ 20.2 23.2 22.7 43.5 53.7 27.3 73.8 108.3 29.0 n Scope 1 n Scope 2 (market-based) n Scope 3 2023 2022 2021 2020 2019 2018 Δ 650.2 718.0 716.8 119.8 209.4 1115.1 Total 1 Our reporting of supply chain emissions includes the following GHG Protocol Scope 3 categories: Category 1: Purchased Goods and Services, Category 2: Capital Goods, Category 4: Upstream transportation and distribution. In 2023 we reported GHG emissions of Categories 1, 2 and 4 by aggregating these under Category 1. It is our intent to assign emissions to each of these separate categories in due course. 2 The methodology used to calculate our GHG emissions follows the 'Greenhouse Gas Protocol (GHG): A Corporate Accounting and Reporting Standard (Revised Edition)', defined by the World Resources Institute/World Business Council for Sustainable Development. We have adopted the operational control approach on reporting boundaries. 3 We continuously review and update our performance data based on updated GHG emission factor, improvements in data quality and updates to estimates previously applied. For 2023, we have applied the latest emissions factors as of 31 December 2023. All location- and market-based figures are gross and do not include netted figures from carbon credits. 4 Upstream and downstream leased assets include our third-party co-located data centres and a property we lease out to tenants. Upstream leased assets also include properties with landlord managed energy from central systems which are outside of our operational control. 5 We selected 2018 as the baseline year for our supply chain emissions, to align with the baseline year used for other categories, and have since reported supply chain emissions for 2021, 2022, and 2023. 6 Reported emissions for Scope 2 location and market-based have been recalculated back to the 2018 baseline, due to updated internal and external data. The associated emissions have also been re-classified from Scope 2 electricity to Scope 3 Category 8 (Upstream Leased Assets) as these emissions are currently outside of our operational control. In 2022 we reported Scope 2 location-based emissions of 103,422 tCO2e; the recalculated figure is 99,782 tCO2e. In 2022 we reported Scope 2 market-based emissions of 1,883 tCO2e; the recalculated figure is 1,963 tCO2e. In 2022 we reported energy use of 467,939 MWh; the recalculated figure is 463,973 MWh. 7 We have recalculated FY 2022 Scope 3 Category 5 GHG emissions from 10,700 tCO2e to 352 tCO2e as DEFRA Material Use emission factors were incorrectly applied to waste production which resulted in an overstatement of emissions. Our operational footprint data follows a reporting period of 1 October 2022 to 30 September 2023. Δ 2023 data subject to independent limited assurance under ISAE (UK) 3000 and ISAE 3410. Current limited assurance scope and opinions can be found within the ESG Resource Hub: home.barclays/sustainability/esg-resource-hub/reporting-and-disclosures/. ESG Data Centre See our ESG Data Centre for further details of our operational GHG emissions since 2018, including our Scope 1, 2 location- and market- based and Scope 3 operational emissions data. For more information on our operational emissions accounting approach please see the 2023 ESG Reporting Framework. 87.2Δ99.8119.2144.0164.4182.1633.3695.8682.153.7108.3880.31.6Δ2.011.5205.7633.3695.8682.1880.3375,087Δ463,973553,250597,720652,809663,93597.4%0.2%2.4%Scope 3Scope 2Scope 135681 Scope 3 categoriesStrategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 1 Reducing our Scope 1 and 2 emissions In 2023, to reduce our Scope 1 and 2 emissions, we maintained focus on improving energy efficiency and replacing fossil-fuel-powered infrastructure with lower-emission alternatives. Energy efficiency measures reduce our overall energy demand and reliance on the grid to power our operations. Concurrently, by replacing fossil- fuel-powered infrastructure, for example, by electrifying our buildings and company vehicles, we will aim to eliminate a significant part of our Scope 1 emissions and prepare our infrastructure to consume electricity from renewable sources. Increasing energy efficiency To continually improve operational energy efficiency, in 2023 we maintained global demand 1 our reduction programmes and right-sized global real estate portfolio – resulting in 44% energy consumption reduction against a 2018 baseline. These efforts also contributed to 2 progress against our global corporate offices, energy use intensity (EUI) milestone by reducing our EUI by 27% against a 2018 baseline. Our global energy optimisation programme contributed to our EUI reduction by adjusting corporate offices' settings and systems during periods of low or no occupancy to reduce our demand for energy while keeping our buildings 3 running. In 2023 the programme contributed to approximately 9.1 GWh in energy savings at our UK corporate offices – equivalent to the annual electricity consumption of approximately 2,600 UK households. Programme projects included 4 Glasgow campus baseload reductions, where we reduced overnight usage of building equipment such as our lighting, heating and cooling systems, and power reductions for our building equipment at 1 Churchill Place in London, planned over bank holidays. Moving forward, we plan to implement the energy optimisation programme at additional corporate offices. Electrification and replacing fossil-fuel- powered infrastructure Replacing fossil fuels with renewable energy In 2023 we continued electrifying our real estate portfolio by replacing end-of-life natural gas heating and cooling equipment with electric- powered alternatives and prioritising electrification in campus developments wherever possible, For example, at our Glasgow campus we replaced natural gas boilers with an air source heat pump – leading to an 84% reduction in Scope 1 GHG emissions compared to 2022 at that campus. As part of the campus redevelopments at 1 Churchill Place, we are electrifying our kitchen cooking stoves. We will continue to incorporate electrification and fossil- fuel-powered infrastructure replacement into future real estate decisions. As part of our commitment to Climate Group's EV100 initiative, we have also made progress in transitioning our corporate vehicle fleet to electric vehicles (EVs) or ultra-low emissions vehicles (ULEVs). By the end of 2023 88% of our UK fleet was converted to EVs and 42% of our global fleet was converted to EVs or ULEVs. All UK colleagues provided with a company car for their role have also been offered funded home-charging equipment to ease the transition to a fully electrified fleet. In addition, we are replacing existing mobile banking vans with electric vans, providing a less carbon-intensive method of serving our Barclays UK customers and communities compared to the previous diesel-fuelled vehicles. Δ In 2023 we maintained 100% renewable electricity sourcing for our global real estate portfolio through instruments including green 6 5 tariffs (55%) and energy attribute certificates (EACs)(45%), continuing to meet our 2025 target ahead of schedule. We also maintained our long-term focus on planning additional on-site renewable energy installations and exploring tools like Power Purchase Agreements (PPAs) that bring additional renewable energy to the grid. We continued developing strategies for on-site renewable energy installations such as solar panels, and have coordinated with stakeholders like local utilities and planning boards with the intent of installing these types of projects in coming years. Sites with existing solar panel installations, including Glasgow, Pune, Northampton and Cambridge Eagle Lab, have 0.40 MW of renewable electricity capacity. 7 Beginning in 2024, up to 80% of Barclays' annual UK electricity needs will be sourced through a PPA supporting Creag Riabhach, an onshore wind farm project in Scotland. Scope 1 and 2 emissions data accounting We continue to work on improving our data quality and accounting methodologies to make meaningful comparisons of emissions data over time and to make informed strategic decisions. Given the evolving nature of climate data and methodologies, past-period figures may change to reflect updates. To manage the impact of these changes we have detailed our operational climate data accounting approach in the ESG Reporting Framework on our ESG Resource Hub. Barclays PLC Annual Report 2023 76 Embedding sustainability into operational practices Across our operations we are introducing new standards and guidelines to help enable the integration of sustainability into decision making. For example, in 2023 we introduced the Sustainability Design and Construction Checklist and Green Leasing Toolkit, which are guidelines that help integrate sustainability criteria into real estate processes in alignment with Barclays' net zero operations strategy. Both guidelines help teams identify gaps in existing real estate processes for leasing transactions and in design and construction projects. They serve as a record of inclusion and applicability of sustainability criteria for a given project, allowing teams to flag inconsistencies between project design and sustainability expectations. Notes: 1 By right-sizing we are optimising our space and associated resources for our operational needs. 2 Corporate offices include offices and campuses. 3 Data represents reduction from 1 October 2022 to 30 September 2023. 4 Baseload is the minimum load experienced by a building energy system over a given period of time, that must be supplied at all times. 5 Green tariffs are programmes in regulated electricity markets offered by utilities, allowing large commercial and industrial customers to buy bundled renewable electricity from a specific project through a special utility tariff rate. 6 Energy attribute certificates are the official documentation to prove renewable energy procurement. Each EAC represents proof that 1 MWh of renewable energy has been produced and added to the grid. Global EAC standards for renewable claims are primarily Guarantees of Origin in Europe and UK,Renewable Energy Certificates (RECs) in North America and International RECs (I-RECs) in a growing number of countries in Asia, Africa, the Middle East and Latin America. 7 Figure has been estimated using 2022 UK real estate property portfolio electricity consumption as a reference. Δ 2023 data subject to independent limited assurance under ISAE (UK) 3000 and ISAE 3410. Current limited assurance scope and opinions can be found within the ESG Resource Hub: home.barclays/ sustainability/esg-resource-hub/reporting-and-disclosures/. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 1 Addressing our Scope 3 operational emissions Supply chain To support our net zero operations strategy, in 2023 we continued to implement our supply chain net zero pathway. As part of our pathway we are working towards a 50% reduction in our supply chain GHG emissions by end of 2030 and a long-term milestone of 90% emissions reduction by the end of 2050 (both against a 2018 baseline). In developing our supply chain net zero emissions pathway, we used the Science Based Targets initiative (SBTi) Corporate Net Zero Standard and Target Setting Tool, consistent with a 1.5ºC- aligned pathway. Engagement and integration Engagement with our suppliers is a key vehicle for change. Our strategy is to engage proactively and constructively across our supplier organisations to increase climate transparency and accountability, and promote emissions reduction. In 2023 we invited 489 of our suppliers to disclose climate- related information such as governance, risk strategy, targets and performance, emissions methodology and data related to climate change, through CDP. We achieved a 75% participation rate, representing approximately 75% of Barclays' 2023 supply chain emissions. In 2022 we updated our standard supplier contract terms with requirements relating to climate change, including an obligation for our suppliers to have an emissions reduction programme in place by 2025, supported by a public reduction target and a commitment to achieve net zero GHG emissions no later than 2050. In 2023 we continued to embed the discussion and negotiation of these terms into new contracts and renewals. This is one of the steps we are taking to work towards our milestone of 90% of our suppliers, by addressable spend, to have science- based GHG emissions reduction targets in place by end of 2030. The terms also include a requirement for our suppliers to periodically disclose their direct and indirect GHG emissions using a recognised standard, such as the GHG Protocol Corporate Accounting and Reporting Standard. We have also continued to work internally with our Sourcing colleagues to embed the consideration of GHG emissions into some of our key tenders for Supplier and Product selection. We are starting to embed the consideration of GHG emissions at the point of demand through seeking less-GHG-emission- intensive ways of meeting our needs. For example, the procurement process for capital projects now integrates sustainability into building design principles through embedding a Sustainability Design and Construction Checklist (see page 76 for more information). Barclays PLC Annual Report 2023 77 Lastly, to support our engagement with suppliers, in 2023 we conducted an intelligence gathering exercise across our top 2,000 suppliers 1 (based on spend ) to seek understanding of their position on environmental and social matters. Data enhancement Our strategy to achieve our milestones is underpinned by obtaining more accurate emissions data from our suppliers, to inform our approach to reducing emissions. Ultimately, we are reliant on our suppliers to provide accurate product-level primary data, in addition to reducing GHG emissions associated with the goods and services we purchase from them, to achieve emissions reductions across their own organisations. To measure progress towards our emissions reduction milestones and inform our supplier intervention strategy, reliable primary GHG emissions data will need to be collected and tracked over time across our supplier organisations. In 2022 primary data accounted for approximately 15% of our supply chain emissions inventory, increasing to 27% in 2023. We understand that our success depends on that of our suppliers, and that progress may be variable and non-linear. Geographic considerations, resource capacities, data availability, legal requirements, market conditions and the varying transition pathways individual companies take, given the technologies available, may all affect the speed at which they can reduce emissions. Supply chain baseline DEFRA conversion factors – which Barclays uses to calculate spend data into supply chain emissions – were revised in 2023. These have been retrospectively applied to Barclays' 2018 baseline and 2022 supply chain emissions, resulting in an increased 2018 baseline and revised 2022 figures. Our 2022 performance 2 against supply chain milestone increased from 8% to 17% due to the change in the DEFRA conversion factors and updated internal data. As our suppliers continue to develop the quality of emissions data for the goods and services we purchase, our reliance on spend data to calculate our emissions will reduce and the volume of primary data will increase. Notes 1 In this section, when referring to 'spend', this is addressable spend, defined as external costs incurred by Barclays in the normal course of business where Procurement has influence over where the spend is placed. It excludes costs such as regulatory fines or charges, exchange fees, taxation, employee expenses or litigation costs, and property rent. 2 Milestones referred to include: 'By end of 2030 we intend to work towards the milestone of 50% GHG supply chain emissions reduction (against a 2018 baseline).' and 'By end of 2050 we intend to work towards the milestone of 90% GHG supply chain emissions reduction (against a 2018 baseline)'. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) Barclays PLC Annual Report 2023 78 Leased assets and waste While our leased assets and waste emissions are lower than other operational emissions, we are pursuing opportunities to reduce them. For example, in 2023 we introduced a Green Leasing Toolkit to support engagements with landlords by encouraging the inclusion of our sustainability criteria throughout the leasing real estate lifecycle. The toolkit includes guidance and preferred contractual language for lease preferences. We are also embedding circular economy principles within our operations. Further details are provided on page 79. TCFD Strategy Recommendation (b) | Strategic Pillar 1 Business travel In 2023 we continued engaging with our stakeholders and colleagues to provide information and tools to encourage more sustainable travel choices. For example, we updated our booking and reporting platforms to highlight low-carbon modes of transport for our colleagues, including EV rentals where available. We provided colleagues with additional guidelines illustrating how they can reduce their travel emissions – identifying, for example, where they could combine multiple trips or switch from air to rail travel. We also continued to engage with our preferred airline partners to explore their plans to use sustainable aviation fuel (SAF). Our 2023 total colleague business travel emissions reduced by 43% against a 2018 baseline – noting these emissions doubled compared to 2022 due to a return to business travel post-COVID. We will continue to engage with our stakeholders and provide colleagues with the tools and resources to align with our net zero ambition. Our intent is to improve the accuracy of our business travel data to better inform emission reduction strategies. Carbon credits Supporting our colleagues We are currently reviewing our approach to the use of voluntary carbon market credits for operational emissions. Our goal is to provide colleagues with the tools and support needed to help reduce their individual environmental footprints. We remain supportive of initiatives to enhance the integrity of the voluntary carbon market across both the supply and demand side. In 2023, for example: • We continued to expand our range of green benefits for colleagues, including our UK EV salary sacrifice and UK and Ireland Bike4Work schemes. In 2023 over 900 colleagues ordered EVs through salary sacrifice and over 650 made use of Bike4Work • Officially launched in 2022, our Barclays Go Green sustainability gamification programme helps colleagues take and track actions that reduce their personal environmental footprint. In 2023, colleagues participated in over 20,000 activities – such as switching off laptop equipment, opting for lower-carbon travel methods and replacing single-use items like cups with reusable alternatives • Our 14 global employee-led environment networks created and participated in activities aligned with Barclays’ climate and sustainability strategy. + Further information about how Barclays engages with colleagues can be found on page 122. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 1 Nature and biodiversity in our operations Nature and biodiversity are intrinsically connected to our efforts to mitigate and adapt to climate change, maintain healthy communities and support productive, sustainable economies. At the end of 2023 we started to identify and assess nature-related impacts and dependencies for our real estate operations informed by the Taskforce on Nature-related Financial Disclosures (TNFD) LEAP (Locate, Evaluate, Assess, Prepare) approach. This evaluation includes assessing our real estate operations' water, pollution, biodiversity and resource use impacts and dependencies. We will continue the assessment in 2024 to evaluate nature considerations in our operations moving forward. The assessment will support our focus on improving resource use and the ability to protect natural environments through circular design principles – including designing-out waste and pollution across our operations, recycling, and regenerating natural ecosystems. Circular economy principles and zero waste We are working to embed circular economy principles across our operations by seeking to eliminate waste at the source through resource use reductions and by improving recycling rates. landfill, incineration and the 1 Across our key campuses we have an ambition to achieve and maintain TRUE (Total Resource Use and Efficiency) zero waste certified projects by end of 2035 with a milestone to divert 90% of waste from environment by end of 2035 – and in 2023 achieved a 53% diversion rate of all waste, a 4% 2 increase from the previous year . Even though more colleagues have returned to work in our office locations, causing the total tonnage of waste to increase since 2022, the waste diversion rate from landfill and incineration has improved. This result illustrates that, while more waste has been created, we are diverting more of it through increased waste segregation and reduced waste stream contamination – as well as through the introduction of more reusable items in our campuses. For example, at our Glasgow and Pune campuses, we have increased waste segregation streams – making it easier for colleagues to put the correct waste in the correct bin. The increased waste segregation streams resulted in an average contamination rate of 14% between Pune and Glasgow, compared to our average of 45% at key campuses where these solutions have not yet been implemented. The overall reduction in contamination rates supports our recycling rates – and, ultimately, our waste diversion milestone. In addition, we are working to divert food waste from landfill and incineration through projects including the installation of on-site composters at our Glasgow and Pune campuses and the creation of commercial food waste collection points at various office locations. In 2023 we also launched our reusable food and beverage dishware programmes across four key campuses with the aim to reduce single-use items and therefore waste. Pollution management Barclays has controls in place to address pollution risks across our property portfolio globally where we operate generators and store diesel. The pollution risk controls are engineered to identify possible pollution sources and pathways for an uncontrolled release to cause environmental harm, assess mitigation measures and identify improvements and actions that can be taken to further enhance our pollution prevention and mitigation measures. In 2023, 41% of our global real estate portfolio remains certified to ISO 14001, the international standard for designing and implementing an Environmental Management System (EMS). Barclays PLC Annual Report 2023 79 Unreasonable Impact company Re:Dish powering sustainable solutions for Barclays After receiving support from Barclays through the Unreasonable Impact programme, Re:Dish has brought its reusable dishware programme full circle to Barclays’ New York City, Wilmington and Whippany campuses. As part of our ambition to become a net zero bank by 2050, Barclays is working to achieve and maintain TRUE (Total Resource Use and Efficiency) zero-waste-certified projects across key campuses by 2035. Re:Dish supports our goal by helping us remove hundreds of thousands of single-use items a year from our waste stream. Re:Dish delivers food and beverage containers to Barclays, collects used containers and cups to clean and sanitise, and returns them for reuse. Instead of requiring more materials and resources for new containers and specialised cleaning equipment, Barclays taps into an existing network of fit-for-purpose dishware and washing services that can efficiently accommodate fluctuating demand. In addition, Re:Dish and Barclays partnered to build colleagues’ understanding of circularity – an important contributing factor to the success of these programmes. Re:Dish containers have a QR code colleagues can scan to see exactly how many times that specific unit has been reused and the resulting estimated environmental impact. To learn more about Unreasonable Impact partnerships, see page 110. Note 1 Key campuses include 1 Churchill Place, Radbroke, Northampton, Glasgow, Pune, Whippany, 745 7th Avenue, Dryrock. 2 Reported waste diversion performance for FY2022 has been recalculated from 65% to 49%, to account for an update in external data. Further details on Barclays’ approach to biodiversity can be found on page 124 . + Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) Barclays PLC Annual Report 2023 80 TCFD Strategy Recommendation (b) | Strategic Pillar 2 Reducing our financed emissions We are committed to aligning all of our financing to the goals and timelines of the Paris Agreement, consistent with limiting the increase in global temperatures to 1.5°C. To meet our ambition, we need to reduce the client emissions we finance – not just for lending but for capital markets activities, too. We work closely with our clients to ensure that over time the activities we finance are aligned to the goals and timelines of the Paris Agreement. Consistent with our Purpose, and taking into account considerations of all relevant business factors, we continue to set emissions reduction targets for our portfolios where possible, aligned with the ambitions of the Net-Zero Banking Alliance (NZBA), of which we are a founding member. We also continue to set and follow clear restrictions on financing certain activities. + Further details on our restrictive policies can be found on page 100. The core building block for developing the transition framework for Barclays to be a net zero bank is our ability to estimate the full in-scope balance sheet financed emissions. 1 In 2020, we developed our BlueTrack TM methodology to measure and track our progress against our financed emissions, setting targets for Energy upstream and Power generation initially. 2 As of 2022, we had reported the baseline TM financed emissions for five sectors covered under BlueTrack targets as well as UK Residential Real Estate where we set a convergence point. where we have set reduction 3 In 2023, we have further extended the scope of our calculations to cover the full in-scope balance sheet financed emissions based on methodology which has been developed using the PCAF Identification of in-scope exposure to calculate financed emissions (as at December 2022) Category Total Barclays balance sheet Exclusions: Cash and bank balances, Cash collateral and settlement balances, Derivative financial instruments, Goodwill and intangible assets, Current tax assets, Deferred tax assets, Other assets, Trading portfolio assets (including drawn loans), Retail lending (personal lending, retail cards) and Property, plant and equipment Retirement benefit assets Total Barclays exposure in scope for computing financed emissions Inclusions: Total in-scope undrawn commitments and contingent liabilities Capital markets financing (33% of Barclays share) Total Barclays' activities considered for financed emissions calculations Value (as at Dec 2022) in £m 1,513,699 (-)1,076,980 (-)3,616 (-)4,743 428,360 (+)246,030 (+)104,734 779,124 Comments Exposures excluded by the PCAF Standard. Emissions covered under Barclays Scope 1 and Scope 2. Emissions on Barclays Bank UK Retirement Fund reported separately as part of Task Force on Climate-related Financial Disclosures Report 2022. We have gone beyond the scope of PCAF’s definition of asset classes to additionally cover undrawn commitments and contingent liabilities. We have excluded exposures for which PCAF is yet to establish a methodology (personal lending, retail cards and Trading balances) from our total undrawn commitments and contingent liabilities. Equity holdings, bond issuances, equity issuances, syndicated loans. TM to set reduction targets for three Standard and have expanded the scope of BlueTrack new sectors - Agriculture, Aviation and UK Commercial Real estate. Additionally, we have expanded the scope of our UK Residential Real 1 convergence point. Estate Hence, we are pivoting our approach to disclosing our financed emissions across two sections: 1 Estimating the full in-scope balance sheet financed emissions using a methodology which 2 has been developed using the PCAF Standard . The data reported in this section of the Annual Report (up to page 83) is as at December 2022. Hence, these numbers follow a lag of one year when compared to other climate-related disclosures based on December 2023 in this report, due to the lead time required to fully analyse our entire in-scope exposures. 2 Continuing to use the BlueTrack™ methodology to assess financed emissions for material sectors and set 2030 targets integrating 1.5°C scenarios. This data is being reported as at December 2023. Note 1 For further details please see page 98. 2 PCAF Standard - PCAF (2022). The Global GHG Accounting and Reporting Standard Part A: Financed Emissions. Second Edition. Estimating the full in-scope balance sheet financed emissions Scope We have identified the scope of coverage using a methodology which has been developed using the PCAF standard. We have included undrawn commitments, contingent liabilities, and capital markets financing. We have calculated financed emissions for c. £779bn of Barclays' activity as at December 2022 (of which £428bn are on-balance-sheet exposures) which is set out in further detail in the following table. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) Barclays PLC Annual Report 2023 81 TCFD Strategy Recommendation (b) | Strategic Pillar 2 Basis of preparation Our approach for calculating financed emissions is based on a methodology which has been developed using the PCAF Standard with the following key exceptions: 1 We have gone beyond the scope of PCAF’s definition of asset classes to additionally cover undrawn commitments, contingent liabilities and capital markets financing activities. For instance, in the case of a loan we consider the committed amount (both drawn and undrawn), as opposed to just outstanding amounts (which is the approach preferred by PCAF) for calculating financed emissions. 2 We have also consistently used the book value of equity and debt for all clients to calculate the attribution factor, while PCAF recommends using the Enterprise Value Including Cash (EVIC) for listed entities. 3 PCAF recommends calculating emissions at a client level. For certain sectors, clients could have presence in activities across multiple parts of the value chain and in such cases reported emissions may not be consistent and reliable to estimate financed emissions. To overcome this challenge we calculate emissions at an activity level, using a range of options aligned to the PCAF Standard's guidance to calculate client emissions. For certain activities – including fossil fuel exploration and production, electric power generation and automotive manufacturing – we employ asset-level production data to estimate client emissions. For activities such as cement and steel production, we use client-reported emissions. Where we do not have sufficient data on reported emissions or physical activities – for example in relation to mortgages where we do not have EPC data available – we use fall-backs based on emission factors. For an immaterial part of our balance sheet (c. 1%), where the appropriate sector fall-backs could not be reliably obtained, we have used the overall portfolio average economic emissions intensity to estimate emissions. + Our Financed Emissions Methodology paper (published in 2024) provides more details of our methodology and can be found within the ESG Resource Hub: home.barclays/ sustainability/esg-resource-hub/reporting-and-disclosures/ Emissions coverage Results We have computed our overall financed emissions based on Scope 1 and Scope 2 of our clients’ emissions as at December 2022. Hence, these numbers follow a lag of one year when compared to other disclosures based on December 2023 in this report. The lag of one year is due to the lead time required to fully analyse our entire in-scope exposures. We have excluded our clients’ Scope 3 emissions from these calculations except for activities where we have set a target on Scope 3 emissions – which includes Energy Upstream, Automotive manufacturing LDVs, Aviation and UK Agriculture. - Livestock and Dairy Farming. This is due to challenges in sourcing reliable and consistent data, not just on reported Scope 3 emissions but also the fall-back emission factors for downstream emission estimations. As we refine our approach and data sourcing strategy, we will assess the suitability of including Scope 3 emissions in our financed emissions disclosures. Aligned to the guidance issued by the NZBA, our metrics and targets for all sectors capture emissions on a CO2e basis. For activities where we have set targets, we have assessed which GHGs are relevant and material for the respective sector. Barclays has assessed the extent to which the o business is aligned to a well-below 2 C pathway by calculating an estimate of our financed emissions for the full in-scope balance sheet as at December 2022, which has enabled us to calculate the coverage of our financed emissions reduction targets across our portfolio (including integration of 1.5°C aligned scenarios and ranges for certain sectors to reflect dependencies outside our control that will determine how quickly our financed emissions can be reduced in these sectors). Our estimation of our overall financed emissions indicates a total annual Scope 1,2 emissions of c.80MtCO2e for FY2022. Among these, we have set 2030 financed emissions targets covering our clients’ Scope 1,2 emissions (including integration of 1.5°C aligned scenarios and ranges for certain sectors and including UK Housing for which we have set a convergence point) for 55% of our full in-scope balance sheet financed emissions. Beyond this we have also set 2030 targets integrating a 1.5°C aligned scenario covering Scope 3 emissions for Energy Upstream, Automotive manufacturing LDVs, Aviation and UK Agriculture – Livestock and Dairy Farming. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 2 Financed emissions for activities with 2030 targets integrating 1.5°C scenarios (as at December 2022) Barclays PLC Annual Report 2023 82 Activities On-balance-sheet lending Activities with 2030 targets integrating 1.5°C scenarios as at December 2022 Automotive manufacturing (LDV) Cement manufacturing Steel manufacturing Fossil Fuel Extraction and Production Power generation 0.0 0.2 0.3 0.8 2.2 1 UK Housing (convergence point) Activities with 2030 targets integrating 1.5°C scenario after December 2022 1.6 UK Livestock and Dairy Farming Aviation 2 Commercial Real Estate Total Notes: 1.6 0.5 0.0 7.4 Scope 1,2 emissions (MtCO2e) Undrawn commitments and contingent liabilities Capital markets financing On-balance-sheet lending Scope 3 emissions (MtCO2e) Undrawn commitments and contingent liabilities Capital markets financing 0.1 0.3 0.9 3.9 16.7 0.0 0.3 1.7 0.0 24.0 0.1 0.1 0.4 0.4 11.4 0.0 — 0.4 0.0 12.8 0.6 — — 7.6 — — 0.3 0.1 — 8.6 4.7 — — 33.1 — — 0.1 1.0 — 38.8 1.6 — — 5.8 — — — 0.3 — 7.7 1 UK Housing is based on a convergence point and includes Social Housing and Business banking real estate which was added to the scope in 2023. 2 We have calculated Commercial Real Estate and Social Housing/Business Banking real estate emissions using “Business loans and unlisted Equity” PCAF asset-class methodology, The scope of coverage for Commercial Real Estate is based on the set of counterparties considered in the 2023 BlueTrack portfolio and may not fully align with our exposure to this activity in 2022. TM Financed emissions for other activities not covered by targets integrating 1.5°C scenarios (as at December 2022) Activities Mining and Quarrying Energy and Water Agriculture, Food and Forest Products Manufacturing Mortgages Materials and Building Transport Other activities Total Government and central bank 1 Government and central bank (Excluding LULUCF) Emissions covered under targets integrating 1.5°C scenarios (excluding Government and central bank) Note: 1 Emissions excluding land-use, land-use change and forestry. On-balance-sheet lending Scope 1,2 emissions (MtCO2e) Undrawn commitments and contingent liabilities Capital markets financing 0.9 0.6 1.4 1.9 0.2 0.3 0.7 3.9 9.9 15.4 17.5 2.3 2.8 0.2 7.4 — 0.2 2.0 5.6 20.4 — — 55% 0.2 0.9 0.0 1.4 — 0.0 0.9 2.5 5.9 — — Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) Barclays PLC Annual Report 2023 83 TCFD Strategy Recommendation (b) | Strategic Pillar 2 Data sourcing and data quality We acknowledge the extent of data quality challenges inherent in the calculations of financed emissions for the full in-scope set of activities. The PCAF Standard provides guidance to measure data quality (DQ) through a hierarchy ranging from DQ1 (best) to DQ5 (worst) specific to each asset class. Our estimation of the data quality is also largely aligned to the PCAF Standard's guidance. Our current data quality is dispersed across DQ1-2 (reported emissions) data, DQ3 (deriving emissions from physical activity data) and DQ4-5 (deriving emissions from revenue or asset-based emission factors). For activities where we have set targets, DQ is mostly concentrated across DQ1-2 and DQ3. We have identified a concentration of lower DQ scores for the category of activities where we are yet to set targets - including banks, financial institutions and sovereigns. This indicates that we need to consider the current estimate of financed emissions for these activities as highly preliminary and indicative only, and which can change materially as we improve data quality. Climate data, models and methodologies are evolving – and are not yet at the same standard as more traditional financial metrics. Our financed emissions calculations rely on externally sourced data mapped to internal customer and client identifiers. The externally sourced data has various limitations for each sector, including lack of coverage, low resolution, consistency and transparency of company-reported data, as well as the time lag for external sources to report estimates or actuals. Time lags could be as much as two years for data such as company value, company revenue share, emissions, production capacity and capacity factors. As a result our financed emissions metrics are at best an estimate of our clients' activities on a given date, using the external data available at that point in time. Data quality distribution of Barclays' financed emissions calculation (as at December 2022) Category 2 Activities with 2030 targets integrating 1.5°C scenario as at December 2022 UK Housing (Convergence Point) Activities with 2030 targets integrating 1.5°C scenario after December 2022 Activities not covered by targets integrating 1.5°C scenarios (including Sovereigns) Total Notes: Scope 1,2 emissions1 DQ1-2 DQ3 DQ4-5 Reported emissions (verified/unverified) Use of physical-activity- based emissions factors Use of economic-activity- based emissions factors 18 % — 22 % 25 % 19 % 74 % 63 % — — 17 % 7 % 37 % 78 % 75 % 64 % 1 For sectors where we calculate Scope 3 emissions – Aviation, UK Livestock and Dairy Farming, Fossil Fuel Extraction and Production, and Automotive manufacturing (LDV) – our data quality distribution is 85% in DQ3 and 15% in DQ4-5. 2 Totals may not be equal to 100% due to rounding. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 2 Our approach to reporting financed emissions data Given the evolving nature of climate data, models and methodologies, past-period metrics may change to reflect updates. To manage the impact of these changes we have adopted a principles-based approach to guide whether prior metrics and baselines should be restated or re-baselined. • A restatement involves updating the historical starting point for a period and recalculating the historical performance. • A re-baseline involves keeping the historical performance constant and recalculating the current period baseline to ensure consistency when reviewing performance. The indicative historical baseline will also be disclosed. Barclays PLC Annual Report 2023 84 Due to this, direct like-for-like comparisons of financed emissions information disclosed may not always be possible from one reporting period to another. Where information is restated or re-baselined this will be identified or explained. In line with our reporting approach for past period metrics, we have re-baselined internal and external data, which has resulted in minor updates (less than 1%) to Energy, Cement and Automotive Manufacturing metrics and a c.2% impact to the Power metrics. The most material change has been the treatment of multi-client shared facilities, which has led to an additional c.4% impact in the baseline (2022) metrics for Automotive Manufacturing. Our approach to reporting financed emissions data Scenario Error identified in our internal finance data or methodology Changes to our methodology and/or data sources to calculate financed emissions (for example, including additional GHGs) Restatement Re-baseline Updates to external counterparty data driven by timing lags when data is reported (for example, counterparty valuations or emissions estimates) Capture in-year • Financed emissions metrics for all years impacted by the error will be restated, including the baseline year. Our approach • The updated methodology will be applied from the start of the current reporting period. • The last reported financed emissions spot metric will be recalculated using the new methodology/data source to provide the new baseline. This will ensure consistency of data and methodology when calculating our performance. • The recalculated baseline and the progress achieved to date will be used to disclose the theoretical baseline for the year in which the targets were originally set. • The cumulative progress will be for the current reporting period (using the new methodology) and the progress up until the last reporting period (using the old methodology). • The impact of updated external data will be included in the current period financed emissions data and the progress metric for the current reporting period. • Data lags are inherent to the process and Barclays will endeavour to use the latest available data . Historically reported metrics will not be updated for data lags. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) Barclays PLC Annual Report 2023 85 TCFD Strategy Recommendation (b) | Strategic Pillar 2 Assessing financed emissions for material sectors and net-zero-aligned targets Basis of preparation TM TM starts by selecting As part of our commitment under the NZBA, we 1 have set targets for material high-emitting sectors in our portfolio. We have developed our BlueTrack methodology to measure and track our targets, which incorporate a 1.5°C scenario for our 2030 targets, for these high emitting 2 material sectors . BlueTrack a benchmark for a sector that defines how financed emissions for a portfolio need to change over time, in line with the goals and timelines of the Paris Agreement – consistent with scenarios limiting the increase in global temperatures to 1.5°C. We measure the financed emissions within a selected boundary for a sector, then aggregate these into a portfolio- level metric – which is then compared to the benchmark. TM is being expanded to cover the BlueTrack Agriculture, Aviation and UK Commercial Real Estate sectors. The Residential Real Estate sector is also being expanded to include housing associations and small business buy-to-let lending, and is now referred to as UK Housing. During 2023 we assessed our baseline emissions from our Shipping sector portfolio as part of our NZBA commitment to set targets covering the transportation sector. This assessment concluded that we provided limited financing to a small number of clients and have limited financed emissions overall. We have therefore not set a target for the Shipping sector at this time. We may reassess our approach in the future should this become a more material contributor to our overall financed emissions. + Our Financed Emissions Methodology paper (published in 2024) provides more details of our methodology and can be found within the ESG Resource Hub at: home.barclays/ sustainability/esg-resource-hub/reporting-and-disclosures/ Sector boundaries We have set targets on the segment of the value chain where either (i) it is generally recognised that decarbonisation efforts are likely to spur the rest of the sector value chain to fall into alignment or (ii) where financiers are likely to have more influence over companies active in that segment. Our choice of segment is based on Barclays' own view, informed by guidance and recommended practice from portfolio alignment initiatives such as PACTA, SBTi and others. Emissions scope TM we must For each sector target in BlueTrack consider which of a company's emissions we should measure – for example, direct or indirect emissions, or selected greenhouse gases such as carbon dioxide and methane. We define this according to the GHG Protocol definition of Scope 1, 2, and 3 emissions. Within the boundary of our target we aim to capture the part of a company's value chain that generates most of their emissions, taking into account considerations including materiality, consistency to benchmark, level of control and whether the emissions can be abated by the company. For example, our Upstream Energy target includes Scope 3 emissions – recognising they are significant for a company extracting fossil fuels. The financed emissions covered under BlueTrack are therefore a subset of the total financed emissions for each customer or client, as they only include the portion of the client's activities that are within both the value chain we have chosen for the sector and the scope of emissions we deem material for that activity. Use of carbon credits TM We do not allow company-purchased offsets such as carbon credits to reduce emissions, as we believe it is important to base a metric on operational activities under a company's control – rather than on unrelated credits, the availability of which may be limited. The methodology does allow company-operated removals, such as on-site carbon capture at a plant – however, given this is currently marginal in the context of emissions, there is currently no impact on our portfolio-financed emissions metrics. Target metrics Barclays uses two financed emissions metrics to set targets: 1. Emissions Intensity: how much CO2e (Carbon Dioxide Equivalent) is released on average for a certain amount of economic activity or material produced; 2. Absolute Emissions: a measure of the absolute emissions generated, or fair share, of the company's emissions over time. We use absolute emissions for the Energy and Agriculture sectors, whose decarbonisation pathway relies on a reduction in production volume as well as on a reduction in intensity. The Energy sector cannot reduce its carbon emissions intensity below a certain point – a barrel of oil cannot be decarbonised, for instance – and therefore a reduction in absolute carbon emissions is more appropriate. The Agriculture sector requires a shift away from the production of meat and dairy towards alternative protein sources, as farmers respond to changing diets. We use emissions intensity for the other sectors, whose decarbonisation pathway relies primarily on reduction in intensity rather than volumes. These metrics are sensitive to factors which are not directly related to real world emissions, such as changes in the book value of debt and equity, for absolute emissions, and changes in revenue share for emissions intensity. Reference scenarios Each of our 2030 target ranges is developed with reference to a 1.5°C-aligned scenario. For the majority this is the IEA's Net Zero by 2050 (NZE2050) scenario. In calculating a convergence point for our UK Housing portfolio and a target for UK Agriculture, we use a UK-focused Balanced Net Zero Scenario developed by the UK's Climate Change Committee (CCC BNZ). For the UK CRE portfolio we use the CRREM scenario that provides decarbonisation pathways across different property types consistent with the NZE2050 scenario. For the Aviation sector we use the Mission Possible Partnership (MPP)'s 'Prudent' (PRU) scenario – a 1.5°C-compatible roadmap for the sector to achieve net zero emissions by 2050. Baseline year We measure our financed emissions for each portfolio against a baseline metric determined in the year we first assessed that target. The baseline year therefore varies across the nine sectors assessed to date, to ensure we are using the most up-to-date data available when we set our targets – or, in the case of UK Housing, a convergence point. Use of target ranges For Power, Cement, Steel, Automotive manufacturing and Aviation, we have set emissions intensity targets using a target range. While we are clear on the reduction required to o align with the 1.5 C benchmark pathway – the higher emissions reduction in the range – we recognise there are dependencies outside our control that will determine how quickly our financed emissions intensity can be reduced in these sectors. The lower emissions reduction in the range reflects our view of the sector, client pathways and commitments at the time of setting the target. We seek to achieve the higher emissions reduction, consistent with our net zero ambition, but achieving it will depend on external factors. Notes: 1 As defined in Foundations of Climate Mitigation Target Setting published by the UNEP Finance Initiative (unepfi.org/wordpress/ wp-content/uploads/2022/05/Foundations-for-climate- mitigation-target-setting.pdf). 2 When we first developed BlueTrack, the best available scenario to develop Paris-aligned benchmarks for our financing portfolios was the International Energy Agency’s Sustainable Development Scenario (SDS) which was aligned to a 1.7°C world. The 2025 targets set for the Energy and Power sectors were informed by the SDS scenario. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) Barclays PLC Annual Report 2023 86 TCFD Strategy Recommendation (b) | Strategic Pillar 2 Update on progress against targets We had set targets for our Energy and Power portfolios in 2020, and since then we had expanded the scope of sectors covered under a target to also include Cement, Steel and Automotive manufacturing. Financed emissions metrics Additionally, we had announced a convergence point for the UK Housing sector. For all sectors where we have previously set targets, we have reported progress as at December 2023. We will keep our policies, targets and progress under review in light of the rapidly changing external environment and the need to support governments and clients both in delivering an orderly transition and providing energy security. It is important to note that progress towards our targets will likely be variable and non-linear. We may need to adapt our approach to respond to external circumstances and to manage the effectiveness and impact of our support for the transition, while remaining focused on our ambition of becoming a net zero bank by 2050. Sector Sector boundaries Emissions scope GHG included Reference scenario Target metric Setting our targets Unit of measurement Baseline year Target versus baseline Cumulative change Absolute emissions (MtCO2e) Physical intensity Monitoring our progress in 2023 Sector Energy Power Cement Steel Upstream Energy 1,2 & 3 Carbon dioxide and methane Power generators 1 Carbon dioxide IEA SDS IEA NZE2050 IEA SDS IEA NZE2050 Cement manufacturers 1 & 2 All GHGs IEA NZE2050 Steel manufacturers 1 & 2 All GHGs IEA NZE2050 Automotive manufacturing Light Duty Vehicles manufacturers Aviation Commercial Aviation (Air Travel) – Passenger (including belly cargo) and Dedicated cargo UK Commercial Real Estate UK Corporate Bank 1,2 & 3 1 & 3 1 & 2 Agriculture UK Livestock and Dairy Farming 1, 2 & 3 UK Housing2 UK buy-to-let and owner- occupied mortgages, Social Housing and Business Banking 1 & 2 Notes All GHGs for Scope 1 and 2; carbon dioxide for Scope 3 Carbon dioxide for Scope 1; All GHGs for Scope 3 IEA NZE2050 MPP Prudent Carbon dioxide, methane and nitrous oxide Carbon dioxide, methane and nitrous oxide Carbon dioxide, methane and nitrous oxide CRREM II CCC BNZ CCC BNZ Physical intensity Physical intensity Physical intensity Physical intensity Physical intensity Physical intensity Absolute emissions Physical intensity Absolute emissions MtCO2e (absolute) 2020 -15% by end of 2025 -40% by end of 2030 -30% by end of 2025 -44% Δ 42.5 59.6 gCO2e/MJ kgCO2e/MWh 2020 tCO2e/t 2021 tCO2e/t 2021 1 gCO2e/km 2022 gCO2e/RTK 2023 -50% to -69% by end of 2030 -20% to -26% by end of 2030 -20% to -40% by end of 2030 -40% to -64% by end of 2030 -11% to -16% by end of 2030 2 kgCO2e/m 2023 -51% by end of 2030 MtCO2e 2023 -21% by end of 2030 2 kgCO2e/m 2023 Portfolio convergence point vs. baseline -40% by end of 2030 Baseline set in 2023 -26% 16.9 -8% -16% 0% 0.8 1.3 6.0 4.3 0.1 Δ 2.4 1.7 Δ 241 Δ 0.573 Δ 1.635 Δ 175.2 Δ 882 Δ 30.0 N/A Δ 32.1 1 Physical intensity (CO2e emissions per v-km travelled by LDV produced), expressed in gCO2e/km. 2 Barclays has identified a 2030 emissions intensity convergence point for UK Housing but has not set a formal target. This replaces the 2022 convergence point for ‘Residential Real Estate’. Δ 2023 data subject to independent limited assurance under ISAE (UK) 3000 and ISAE 3410. Current limited assurance scope and opinions can be found within the ESG Resource Hub: home.barclays/sustainability/esg-resource-hub/reporting-and-disclosures/. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 2 Baselines at December 2023 Barclays PLC Annual Report 2023 87 Unit Baseline year Baseline metric (last reported) Previously reported metrics Recalculated metrics Financed emissions for December 2022 Change at December 2022 (percentage change) Recalculated financed emissions for December 2022 Theoretical baseline metric (re-baselined) Sector Energy Power Cement Steel MtCO2e (absolute) kgCO2e/MWh tCO2e/t tCO2e/t 2020 2021 Automotive manufacturing gCO2e/km 2022 Aviation UK Commercial Real Estate Agriculture UK Housing1 Notes: gCO2e/RTK 2 kgCO2e/m MtCO2e (absolute) 2 kgCO2e/m 2023 75.7 331 0.625 Δ 1.945 167.2 Δ 882 Δ 30.0 Δ 2.4 Δ 32.1 51.7 302 0.610 -32% -9% -2% 51.6 298 0.611 No major impact of methodology changes 167.2 N/A 174.8 Δ 75.4 Δ 326 Δ 0.626 Δ 174.8 2 Replacing the former UK Residential Real Estate with a new baseline on an expanded scope 1 Barclays has identified a 2030 emissions intensity convergence point for UK Housing but has not set a formal target. This replaces the 2022 convergence point for ‘Residential Real Estate’. Δ 2 The former UK residential real estate baseline, was re-baselined to 32.0 from 32.9, as reported in FY2022. Δ 2023 data subject to independent limited assurance under ISAE (UK) 3000 and ISAE 3410. Current limited assurance scope and opinions can be found within the ESG Resource Hub: home.barclays/sustainability/esg-resource-hub/reporting-and-disclosures/ Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 2 Progress against our existing sector targets Barclays PLC Annual Report 2023 88 Financed emissions - Energy Financed emissions - Power Financed emissions - Cement Absolute emissions MtCO2e (Indexed 2020 = 100) Physical Intensity kgCO2e/MWh (Indexed 2020 = 100) Physical Intensity tCO2e/t (Indexed 2021 = 100) Dec'23: 42.5 △ (-44%) Dec'23: 0.573 △ (-8%) Dec'23: 241 △ (-26%) 2020 2025 2030 2040 2020 2025 2030 2040 2020 2025 2030 2040 IEA NZE Benchmark: World Barclays' progress Portfolio target path Portfolio target path IEA NZE Benchmark: World Barclays' progress (range) Portfolio target path IEA NZE Benchmark: World Barclays' progress (range) Financed emissions - Steel Financed emissions - Automotive manufacturing Physical Intensity tCO2e/t (Indexed 2021 = 100) Physical Intensity (gCO2e/km) (Indexed December 2022 = 100) Dec'23: 1.635 △ (-16%) Dec '23: 175.2 △ (0%) 2020 2025 2030 2040 2020 2025 2030 2040 Portfolio target path IEA NZE Benchmark: World Barclays' progress (range) Portfolio target path IEA NZE Benchmark: World Barclays' progress (range) Note: Δ 2023 data subject to independent limited assurance under ISAE (UK) 3000 and ISAE 3410. Current limited assurance scope and opinions can be found within the ESG Resource Hub: home.barclays/sustainability/esg-resource-hub/reporting-and-disclosures/ 020406080100120140160020406080100020406080100120020406080100120020406080100120 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 2 Progress against our BlueTrackTM sector targets TM This report provides an update on our progress towards achieving our previously announced 2025 and 2030 BlueTrack sector targets. In 2023 and cumulatively, there are a number of drivers behind the changes in our portfolio emissions, including changes in our financing across both our lending and capital markets financing activity, our clients' emissions, client data and metrics such as company valuation, and other data inputs and methodology updates as defined in our Financed Emissions Methodology paper (published in 2024). We expect to continue to see these impact our metrics in the future as data availability and quality, methodologies, guidance, and best practices for calculating our financed emissions metrics – all of which include differing levels of estimation –continue to evolve and be refined. Energy To date our absolute financed emissions from our upstream Energy portfolio are down 44% to Δ 42.5 MtCO2e from our 2020 baseline – an additional 12% reduction from our 2022 level. Of our total financed emissions, c.79% was related to oil, gas and natural gas liquids (NGLs) production, with NGLs being relatively immaterial. The remaining c.21% was attributable to coal production. Our progress in 2023 largely reflects reductions in our total financing volumes for this portfolio as well as impacts from changes in company book values which can fluctuate year to year and thus impact cumulative and year-over-year progress (either positively or negatively) on our target. Power In 2023 our Power generation portfolio achieved a 26% cumulative reduction in emission intensity – an additional 17% reduction from our 2022 levels. This reflects our clients' continued progress in reducing their own emissions intensity, which was identified in part through improved data collection and analysis, as well as net reductions in the intensity of our new lending activity – but was partially offset by a higher intensity mix for our capital markets financing. the decreased intensity reflects our clients' continued progress in achieving emissions reductions and a shift in our financing activity mix towards lower-emissions clients. Automotive manufacturing Additionally a material portion of our 2023 progress was driven by a short-term transaction. There is a risk that we are not able to replace this with a transaction(s) of similar size and emissions intensity which could result in an increase in our reported emissions intensity. TM Within our Power portfolio our clients' ability to continue transitioning, and therefore our ability to continue increasing our green and transition financing to help deliver our BlueTrack Sustainable Financing targets, are dependent, at least in part, on supply chains for renewable energy, required investments in grid infrastructure, a stable or positive policy environment, and other factors potentially beyond our control, including our clients' strategic or financing decisions. and Despite our progress to date and the actions we have taken to manage our portfolio, the likelihood of achieving our targets – particularly the 2025 target where the potential management actions are narrowing – could be significantly impacted by the variables and dependencies described on this page. Cement The emissions intensity of our Cement portfolio has reduced by a cumulative 8% against our 2021 baseline – a decrease of 6% from last year’s metric. During 2023 we’ve seen a material number of our clients in this sector update their emissions intensity targets and receive SBTi validation as 1.5°C-aligned. Steel Our Steel portfolio emissions intensity has dropped by c.16% from our 2021 baseline – an additional 5% decrease this year. During 2023 During 2023 our Automotive manufacturing portfolio's emissions intensity remained broadly flat. This reflects a reduction in the emissions intensity of our clients as they increase their electric vehicle sales, but was partially offset by year-over-year reductions in our clients' green bond issuance and a net increase in the emissions intensity of our lending activity due to the mix of our portfolio. Future target progress To date, emissions reductions in the real economy have not been sufficient to align economies to a 1.5°C pathway. We expect our progress against these targets will continue to be non-linear, due to the many external dependencies and variables beyond Barclays' control that may determine the pace of transition. For example, a recent assessment identified that plans, projections and policies for fossil fuel production by governments are not in line with the goals and timelines of the Paris 1 . Agreement Going forward our metrics will continue to have the potential to reflect different levels of volatility and could be impacted by a variety of external factors, including but not limited to: • The pace and timing of our clients’ progress, on their individual transition pathways • Future technological advancements • The public policy and regulatory environment • Geopolitical or regional developments • Updates to data inputs used by BlueTrack TM (e.g. company valuations). The volatility of the mix and volume of capital markets financing, which is included in our Barclays PLC Annual Report 2023 89 metrics, may also result in significant increases and decreases in our metrics. Our ability to achieve our targets may be affected positively or negatively by these external factors. Our target progress in future years could be impacted by client portfolio decisions driven by other non-financial factors, such as counterparty risk, and other relevant business considerations. Changes in our financing activity for a single client within a portfolio can have a significant impact on our reported metrics and progress and may be outside of our control. Progress against our targets may also be impacted by management decisions based on key drivers unrelated to climate or the transition, for example prudent risk management practices. Specifically across the Cement, Steel and Automotive manufacturing portfolios, in addition to the general risks and dependencies outlined above, these targets are particularly sensitive to even minor changes in our financing mix or clients' emissions intensity, given the relatively limited number of clients included in these portfolios – so progress towards these targets could be particularly volatile and significantly impacted by the portfolio and client dependencies outlined above. Notes: 1 unep.org/resources/production-gap-report-2023 Δ 2023 data subject to independent Limited Assurance under ISAE (UK) 3000 and ISAE 3410. Current limited assurance scope and opinions can be found within the ESG Resource Hub: home.barclays/sustainability/esg-resource-hub/reporting-and- disclosures/ Managing our portfolios We continue to manage our portfolios, balancing between our commercial objectives, prudent risk management practices and other non-financial objectives in support of our strategy. As part of this we take into account our relevant climate- related risks and considerations, including how our TM portfolios are performing against our BlueTrack targets so this can be evaluated in context alongside other relevant business metrics. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) Barclays PLC Annual Report 2023 90 TCFD Strategy Recommendation (b) | Strategic Pillar 2 We monitor our performance against our climate targets on a regular basis. Where we identify targets are potentially at risk of being missed – particularly as target dates draw nearer and the opportunities for us to take management actions narrow – we will continue to reassess our approach, taking into account broader business considerations including potential franchise impacts. During 2023 we have continued to invest in building improved reporting, tools, and processes including our Client Transition Framework, which enables us to adjust management oversight based on our evolving estimates of our future potential performance against these targets. + Further details of how climate risk-related considerations are managed can be found in the managing impacts in lending and financing section on page 236. Client Transition Framework (CTF) The CTF, first piloted in 2022, supports our evaluation of our corporate clients' current and expected future progress as they transition to a low-carbon business model. We conduct these assessments annually for corporate clients in the Corporate and Investment Bank that are in-scope for sectors targets have been set. As where BlueTrack TM new BlueTrack targets are set the CTF will be applied to our corporate clients in those sectors. TM During 2023 we enhanced our CTF based on recommendations from the external review of our pilot. The continued development of the CTF leverages climate expertise across Barclays and is informed by the evolving landscape and guidance from third-party frameworks such as TPI, CA100+ and SBTi, and other industry initiatives including the UK's Transition Plan Taskforce, and GFANZ. We have maintained the general structure of our assessments with component scores aggregating into an overall CTF score. The ambition component seeks to assess a client's alignment with our emissions reduction targets and 1.5°C scenario benchmarks across the past, present, near- and long-term future emissions. In our scoring assessments we place a higher weighting on their past, present and near-term future emissions targets than on their long-term ones. The credibility component seeks to assess the qualitative elements of a client’s transition plan. It considers criteria that indicate the likelihood a client will meet its targets, such as board oversight, low-carbon technologies employed, and green capital or operational expenditure plans. We more heavily weight the criteria that are critical to having a credible plan than those that are determined to be supporting criteria. Most of these criteria are consistent across sectors, however, we also consider some sector- specific criteria. In total we evaluate over 80 data points for each assessment. Examples of our CTF criteria include, but are not limited to: • The company’s ambition and targets to reduce operational (Scope 1 and 2) emissions • Historic Scope 3 disclosures and Scope 3 reduction targets, along with a 2030 target • Any expansion of high-carbon activities • Forward-looking green capex plan to achieve their targets. The sub-scores for each component are combined to arrive at an overall CTF score from T1 (best) to T5 (worst). We have codified where clients would be deemed out-of-scope for our CTF assessments. We have set a minimum revenue share threshold to identify which clients are required to be assessed, though clients below this threshold may still be assessed. CTF overview Ambition Credibility Assesses clients’ past, present and future emissions as a proxy for their emissions reduction ambition Assesses the critical and supporting qualitative elements of clients’ transition plans as a proxy for the credibility of their plans Past emissions Evidence of progress in emissions over the last three years Present emissions Comparison of current TM BlueTrack emissions against target glidepaths Future emissions Assessment of client targets including projected emissions metrics and rates of change to 2030 and 2050 Critical criteria Supporting criteria Assessment of disclosed indicators that significantly impact the likelihood of achieving set target(s), such as governance indicators, use of low-carbon technologies, green spending plans, and expansion of carbon-intensive assets Assessment of the level of consistency given to transitioning their business, such as the use of offsets/ credits, TCFD alignment and SBTi target validation submission Sector-specific considerations Assesses transition-related elements that have not been addressed within the other sections Sector-specific indicators Unscored criteria Additional sector-specific factors that impact the strength of a transition plan Factoring additional data points that might be beneficial for benchmarking purposes and/or for future reference Energy Power Cement Just transition pilot • Methane commitments • Coal phase- out plan • Target set on gross basis Ambition score A1- A5 Credibility score C1 - C5 Client Transition Framework score Best T1 T2 T3 T4 T5 Worst Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) Barclays PLC Annual Report 2023 91 TCFD Strategy Recommendation (b) | Strategic Pillar 2 Embedding the CTF CTF assessments are increasingly used to inform decision-making across Barclays, including client engagement, restrictions on financing and capital allocation. During 2023 we expanded how CTF scores are used in support of our broader climate strategy. The CTF informs our engagement with clients while also helping to identify and manage transition risk in our own financing portfolios. Capital is critical for a successful energy transition and we are focusing our financing towards clients actively engaged in the energy transition. The scale of our business gives us the opportunity to help finance the energy transition – to use our global reach, products, expertise and position in the global economy to work with our clients, including those in the Energy sector, as they transition to a low-carbon business model. In 2023 we began climate-specific engagement for those clients with CTF scores of T4 and T5, facilitated by a newly established Client Transition Review Forum (CTRF). The CTRF consists of senior representatives from across Sustainable Finance, ESG & Sustainability, Climate Risk, Portfolio Management, and Banking and is chaired by the Head of Sustainable Finance. Informed by the CTF, this new forum conducts holistic reviews of our business appetite alongside the future client relationship potential. These are informed by the CTF assessment and take into account consideration of relevant risks and other business factors. We have found this engagement helps increase our connectivity with these clients and can be useful in identifying opportunities to further finance their transition. We are also using the CTF scores to inform our business and credit appetite as we look to manage transition risks within our portfolios. To do this we have begun implementing CTF-linked mandate and scale limits. The CTF approach is kept under review and we are considering enhancements in 2024, including reviewing the weightings for criteria such as energy clients capex, to align elements more closely to our updated Climate Change Policy. CTF results n T1 (best) n T2 n T3 n T4 n T5 (worst) These reviews help determine our financing appetite for these clients (including consideration of client retention and conditions to refinancings), alongside implications for our emissions reduction targets, commercial, credit and reputational impacts.  Notwithstanding the outcomes of the CTRF reviews, financing decisions are transaction specific, and will continue to be subject to consideration by relevant committees, such as in relation to credit risk, reputation, and capital impact. As a newly established forum, its governance of the CTRF will continue to evolve to ensure it remains fit for purpose. We reviewed over 300 client counterparties at the CTRF in 2023, engaging with clients as appropriate, to help build awareness of the need to transition and gather information on how we can best support them in their journey. The CTF helps us prioritise client engagement, focusing on those most at risk of falling behind our transition expectations. We have also begun to use the results from the CTF assessments to drive engagements with clients, facilitating discussions about their transition plans and providing insights such as highlighting how they benchmark against their peers. Note: Charts and figures exclude clients determined to be out of scope for the CTF assessments. Clients may have scores in multiple sectors but are included only once to avoid double- counting. Using our updated CTF methodology we completed assessments covering over 1,250 counterparties during 2023 across our Power, Energy, Steel, Cement, Automotive manufacturing and Aviation BlueTrack portfolios. TM sector Findings, by client count, from our assessments include: • 86% have a public emissions reduction target • of which 38% in SBTi-eligible sectors have had their targets validated • 67% have executive compensation tied to ESG progress • 85% have explicit board oversight of their transition plan or emissions targets • 40% have committed to a just transition. 5%6%21%17%36%48%37%29%1%By client countBy lending limitsStrategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 2 Energy and Power Context: The Energy and Power transition The successful transition of the Energy and Power sectors is crucial to achieve net zero by 2050 as together they account for 75% of global GHG emissions, the majority of which come from the combustion of fossil fuels by end users – for 1 example, in automotives and power generation . Emissions from fossil fuel extraction, including from flaring and venting, is also significant – and responsible for 40% of global methane 2 . emissions The global economy still uses fossil fuels for many essential activities – including electricity generation, transport and heating. The IEA scenarios to limit global warming to 1.5°C assume continued but reducing use of fossil fuels as part of the energy mix. As Energy and Power play a fundamental role in society, the transition must balance the need to address energy security and shift energy supply while meeting energy demand. Consideration must also be given to the need for a just transition, ensuring equitable access to energy across communities. We will continue to support an energy sector in transition, focusing on the diversified energy companies investing in low carbon and with greater scrutiny on those engaged in developing new oil and gas projects. Notes: 1 See climatewatchdata.org/ghg-emissions 2 See iea.org/energy-system/fossil-fuels/methane-abatement Reducing our Energy and Power-financed emissions We have set targets to reduce our financed emissions from our Energy and Power portfolios in line with the decarbonisation pathway set out in the IEA Net Zero scenario (IEA NZE). To meet our targets we utilise our full toolkit including CTF assessments, client engagement, portfolio management and restrictive policies, which are included in our Climate Change Statement. As outlined on page 90 above, our CTF assessments evaluate over 80 data points for each assessment and, in relation to Energy and Power, include the following additional criteria: • Methane emissions reduction targets (for Energy) • Commitments to phase-out thermal coal (for Power) We actively engage with clients to help build awareness of the need to transition and gather information on how we can best support them in their journey. The CTF is helping us to prioritise client engagement, focusing on those most at risk of falling behind our transition expectations. We have established a climate portfolio management team to steer our portfolio towards achieving our targets and manage transition risks, using CTF scores to inform our business and credit appetite. Total exposure to the Energy sector is subject to a constrained and closely monitored aggregate risk appetite. We have begun implementing CTF- linked credit limits for the clients most at risk of failing to transition in line with our targets and climate risk appetite – currently identified as those with scores of T4 and T5. We have a Climate Change Statement which sets out our positions and approach to sensitive sectors. In 2024 we have updated the Climate Change Statement to include new requirements for the Energy sector and restrictions on the type of exposures and risk we will finance going forward. Barclays PLC Annual Report 2023 92 Notwithstanding the outcomes of the CTRF reviews, financing decisions are transaction specific, and will continue to be subject to consideration by relevant committees, such as in relation to credit risk, reputation and capital impact. By 2026, we will only provide financing to Energy clients with Scope 1 and 2 emissions reduction targets, methane emissions targets, and commitments to end all routine and non- essential venting and flaring. + More details on the updated policy can be found on page 100, our Climate Change Statement can be found home.barclays/ sustainability/esg-resource-hub/statements-and-policy- positions/ and further information on our client engagement can be found on page 107. Power portfolio • 74% of in-scope clients will have phased-out coal by 2030 Under the updated Climate Change Statement, Energy Groups with more than 10% of their total planned upstream oil and gas capital expenditure in expansion, non-diversified groups and Energy Groups with the lowest CTF assessment scores will be subject to mandatory annual review by the CTRF to determine whether continued financing support is appropriate in the context of their expansion plans and overall transition plan. CTF Energy and Power portfolio results Energy portfolio • 78% of in-scope clients have a methane- reduction target n T1 (best) n T2 n T3 n T4 n T5 (worst) CTF energy portfolio score descriptions Note: Charts and figures exclude clients determined to be out of scope for the CTF assessments T1 (best) T2 T3 T4 Clients are fully aligned with our NZE targets. This requires net zero targets (NZE 1.5°C-aligned or equivalent) across all relevant scopes, including Use of Sold Product (Scope 3, Category 11) by 2050 (for Energy), evidence of strong progress already made, and disclosures of advanced planning to reduce emissions further. Clients have targets across all relevant scopes and strong plans but may be missing some of the clarifying details of a T1 plan – or may not have demonstrated strong steps taken to date. Clients may have very ambitious targets but lack the details to evidence that they will achieve it, a weak target but robust disclosures evidencing that they will achieve it, or a combination thereof. Energy clients without Scope 3 disclosures and Scope 3 targets cannot achieve better than T3. Clients have poorly disclosed plans. They generally have some combination of targets that are weaker than the scenarios require, disclosures lacking in detail, or limited evidence that steps are already being taken. T5 (worst) Clients have the default and lowest score. These clients provide limited publicly available information on their sustainability targets and strategy. A client must have publicly demonstrated transition planning including some evidence of their historic, current and future emissions reduction efforts to score better than T5. By client countBy lending limitsBy client countBy lending limitsStrategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 2 Aviation Currently there are no alternative power technologies – such as electric or hydrogen – for commercial aircraft that are expected to be at scale for the foreseeable future. Therefore, decarbonising the Aviation sector over the next 10-15 years will require a significant increase in the historical pace of emissions reductions – which will be dependent on both the price and availability of sustainable aviation fuel (SAF) and the continued production and delivery of lower- emissions aircraft. Our Aviation emissions intensity target We have set a target to reduce the financed emissions intensity of our Airlines portfolio by 11-16% by end of 2030 against a 2023 baseline, methodology: calculated using our BlueTrack TM • The lower emissions reduction in the range reflects a convergence point for our portfolio with the MPP PRU scenario, which is consistent with limiting global warming to 1.5°C. • The higher emissions reduction in the range is aligned to the rate of emissions intensity reduction in the MPP PRU scenario, consistent with our approach for our other existing 2030 targets. Financed emissions - Aviation (Passenger and Cargo) Physical Intensity (gCO2e/RTK) (Indexed December 2023 = 100) Dec'23: 882 △ 2023 2025 2030 2040 MPP Aviation Pathway Barclays' progress Portfolio target path (range) Estimating our financed emissions Barclays is a founding signatory to the Pegasus Principles – the first climate-aligned finance framework for the Aviation sector, developed by the Rocky Mountain Institute (RMI) in partnership with global banks and in consultation with leading airlines and lessors, The Pegasus Principles will launch publicly this spring. In developing our approach for the Aviation sector we have worked closely to align our BlueTrack™ methodology with this common framework we expect will also be used by a number of other peer banks. By aligning ourselves with an emerging industry consensus approach we hope to create consistency and transparency for our clients and for our stakeholders in our own reporting. In line with the Pegasus Principles we are estimating the financed emissions and emissions intensity of our Aviation portfolio using a physical intensity metric, gCO2e/revenue-tonne-kilometre (gCO2e/ RTK). The scope of this portfolio target includes emissions related to direct combustion of jet fuel by aircrafts (tank-to-wake/Scope 1) and upstream production and refining (well-to-tank/ Scope 3) for commercial passengers (including belly cargo) and dedicated air cargo operators. Emissions scope can differ based on the actual operator of the aircraft, as the owner of the aircraft may not necessarily be the operator – lessors versus airlines, for example. Military aviation, corporate jets, general civil aviation, tour operators and multi-modal logistics companies are out of scope due to low materiality (as a share of sector emissions) and data availability challenges. Barclays PLC Annual Report 2023 93 To do this we have partnered with PACE (Platform for Analysing Carbon Emissions), a Pegasus Principles-qualified data provider, to provide granular emissions and activity data based on specific flight routes and aircraft flown for each airline operator. + Further details on our financed emissions methodology can be found in our latest Financed Emissions Methodology paper (published in 2024) at: home.barclays/esg-resource-hub/ reporting-and-disclosures/ Future progress against this target The general factors outlined on page 89 in relation to progress against our targets will equally be relevant to this portfolio. Additionally, and more specifically, we are clear as to the level of emissions reductions required to align with the MPP pathway – but we recognise there are many dependencies and variables outside of our control, and that of our clients, which will determine how quickly emissions intensity can reduce in this sector. We note that our clients’ ability to meet their own targets is dependent on continued regulatory, policy, technical, and supply chain support for the industry – including the future availability and price of SAF – and clients' progress towards achieving their targets may impact our ability to achieve our own. Additionally we note that, while we are setting an 2030 interim target, many of our clients have set their own interim targets to a 2035 date to specifically account for hoped-for growth in SAF production – and, since the level and timing of that growth is an imperfect estimate, the pathway to our targets may not be linear (or close to linear), and may limit our ability to accurately determine whether we are on path to achieve, or are able to achieve, our own targets. Note: Δ 2023 data subject to independent limited assurance under ISAE (UK) 3000 and ISAE 3410. Current limited assurance scope and opinions can be found within the ESG Resource Hub: home.barclays/sustainability/esg-resource-hub/reporting-and- disclosures/ 020406080100120Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 2 Agriculture Barclays finances customers and clients across the agriculture-food value chain – from farmers and producers of food products to retailers and restaurants. As one of the largest lenders to farmers in the UK, Barclays is well placed to provide support through the changing nature of the Agricultural sector – in particular the ongoing shifts in consumer diets. Other factors important to consider are the impact of decarbonisation on broader food security and affordability, where upside and downside risks exist depending on the form the transition takes as well as the opportunity for carbon sequestration and improving biodiversity – given the sector controls 71% of land in the UK. + Further information on our management of nature-related risks, including in the UK Farming sector, identified during our TNFD assessment of our European Agriculture and Food portfolio can be found on page 276. To support UK farmers through this transitional period, Barclays finances activities that aim to reduce emissions in Agriculture and result in nature-positive outcomes. This includes investment in low-carbon farming measures and financing to improve machinery energy efficiency. We also have a dedicated Agriculture Technology Fund to support farming clients undertaking more sustainable practices or implementing energy- efficiency improvements. In addition, we support early-stage companies developing technology solutions needed for the transition to net zero through our Sustainable Impact Capital portfolio. For example, in 2023 we invested in Agricarbon – a UK-based soil carbon measurement start-up. + Further details on our Sustainable Impact Capital can be found on page 117. Barclays engages with farmers to explore the challenges and opportunities that may emerge from the decarbonisation of the Agricultural sector. In 2023 we launched a survey of our UK Livestock and Dairy farming clients to better understand the challenges they may face in progressing towards net zero. We also work individually with clients using our Client Transition Tool (CTT) to identify nature and decarbonisation risks, as well as considering social risks. We support peer-to-peer learning through our Farm to Farm initiative that facilitates events for farmers in similar geographic areas to cultivate innovative sustainable farming practices. Over 100 farming clients attended Farm to Farm events in 2023, with further events planned for 2024. Estimating our financed emissions There are significant challenges to calculating emissions for the Agricultural sector, notably a critical lack of data on the activities and practices of our agricultural customers and clients, and modelling challenges around agricultural emissions intensity. This is exacerbated by the highly disaggregated nature of the farming industry – characterised by a large number of small farm holdings – which makes collating and processing data challenging, and requires the use of estimated data. As a result Barclays has focused its initial assessment on the UK Dairy and Livestock sector – which is responsible for c.70% of UK total agricultural GHG emissions. Barclays is setting a target to reduce the absolute emissions (MtCO2e) of our UK Dairy and Livestock portfolio by 21% by end of 2030, against a 2023 baseline – in line with the Balanced Net Zero (BNZ) 1.5°C- aligned scenario developed by the CCC. To help advance approaches to Agriculture- financed emissions measurement, and target setting in the banking sector more broadly, Barclays is a member of the Banking for Impact on Climate in Agriculture (B4ICA) working group – which produced an introductory guide on target setting for the sector in 2022 and worked on a further update over 2023. + B4ICA Introductory guide can be found at: wbcsd.org/Focus- Areas/Banking-for-Impact-on-Climate-in-Agriculture-B4ICA Barclays PLC Annual Report 2023 94 Barclays is also engaged in a three-year collaboration with Oxford University to develop food type production datasets for the UK. The aim is to quantify Barclays-financed emissions in more detail and consider additional transition risks. + Further details on our partnership with Oxford University can be found at: home.barclays/news/pressreleases/2022/10/ barclays-and-oxford-universityannounce- 3-year-agri- climate-part/ + Further details on our financed emissions methodology can be found in our latest Financed Emissions Methodology paper (published in 2024) at: home.barclays/esg-resource-hub/ reporting-and-disclosures/ Future progress against this target The general factors outlined on page 89 in relation to progress against our targets will equally be relevant to this portfolio. Additionally, and more specifically, the transition of the UK Dairy and Livestock sector is significantly dependent on broader consumer behavioural change and public policy interventions – which are outside Barclays' control and may affect our ability to achieve this target. Further, we expect the data underlying the UK Dairy and Livestock model to continue to evolve and be refined in order to address the challenges outlined above, and that this could impact our metrics and this target. Financed emissions - UK Agriculture: Dairy and Livestock Absolute emissions (MtCO2e) (Indexed December 2023 = 100) Dec'23: 2.4 △ 2023 2025 2030 2040 CCC - Synthetic BNZP Scenario: UK Barclays' progress Portfolio target path Note: Δ 2023 data subject to independent limited assurance under ISAE (UK) 3000 and ISAE 3410. Current limited assurance scope and opinions can be found within the ESG Resource Hub: home.barclays/sustainability/esg-resource-hub/reporting-and- disclosures/ 020406080100120 Barclays PLC Annual Report 2023 95 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 2 Barclays' actions to decrease the emissions intensity of its Agriculture portfolio must be complemented by public policy interventions to drive consumer and behavioural change. Lever Diet change and food waste Low-carbon farming Low-carbon machinery Climate Change Committee's description Barclays' actions 20% reduction in meat and dairy consumption (replaced with plant-based), and 50% reduction in food waste (mostly holds) by end of 2030 Behavioural and innovative measures to decarbonise food production, such as cover cropping and anaerobic digestion Electrification, hydrogen and (later) phase-out of biofuels • Assess and support farmers' ability to adapt income streams in line with changing consumer habits • Support farmers to implement low-carbon farming methods through new and existing products • Work across the supply chain to explore enabling low-carbon farming methods for a greater number of farmers • Offer customers incentives for renewables, including Green Barclayloan, Agriculture Technology Fund, and Green Asset Finance • Work with the Agricultural machinery sector to understand viability and availability of low-carbon machinery Carbon Clarity partnership supports UK farmers Launched in 2018, the Rebuilding Thriving Local Economies initiative was launched in four locations across the UK to identify how Barclays can provide support over and above what we do every day as a bank. By collaborating with local people and organisations, it has focused on helping individuals develop skills and confidence – as well as supporting businesses to grow. In 2023 Barclays partnered with The Royal Countryside Fund to expand its Carbon Clarity programme and provide free support for 53 farms in Somerset and Norfolk to understand how they could better manage carbon. The programme offered an introduction to carbon reduction on farms through group workshops, one-to-one support, and assistance in creating a carbon ‘action plan’. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 2 UK Commercial Real Estate Estimating our financed emissions The Commercial Real Estate (CRE) sector has a role to play in the decarbonisation of UK buildings, the second-highest-emitting UK sector. CRE represents the next highest portion of GHG emissions in that sector after residential buildings, primarily from the fossil fuel heating systems used. There are number of significant challenges to decarbonising the entire UK buildings sector, which require engagement and systematic change, outside of Barclays’ control and as further outlined on page 97. CRE sector challenges are further compounded by the added complexity of landlord-tenant dynamics – which requires collaboration on minimising energy use, sharing of energy data and consideration of energy intensity of fit-outs and retrofit solutions. Further, the diverse building stock in the UK is likely to require tailored client strategies for these retrofit solutions. The different characteristics of the clients in this portfolio – which include institutional real estate investors and quoted real estate companies with their own transition strategies and stakeholder expectations – mean there are different and additional potential drivers of transition in this portfolio. Further, the relationship-led nature of the UK Corporate Bank and its in-house asset management expertise enables a client-first approach to influence transition planning at a portfolio level. We are therefore setting a target for this portfolio but recognise that there are significant challenges to achieving it as a result of factors outside of Barclays' control. The in-scope portfolio represents the majority of the UK commercial and residential real estate investment financing to assets across a diverse range of sub-sectors including office, retail, industrial and logistics, and residential properties managed within the UK Corporate Bank. To support the transition of our commercial real estate clients we have set a target to reduce the 2 financed emissions intensity (kgCO2e/m ) by 51% by end of 2030 against a 2023 baseline, calculated using our BlueTrack methodology and integrating the approach recommended by PCAF. TM The emission reductions required aligns with CRREM 2022 – the leading global standard and initiative for operational decarbonisation of real estate assets – which provides the granularity of pathways for sub-sectors within the in-scope portfolio. We may expect our CRREM pathway to change if the portfolio materially changes. The high proportion of commercial properties within scope has created challenges in data matching to external sources. Consequently, we are investing in our systems to increase the data coverage and decrease the use of estimations in our target setting in future years. + Further details on our financed emissions methodology can be found in our latest Financed Emissions Methodology paper (published in 2024) at: home.barclays/esg-resource-hub/ reporting-and-disclosures/ Barclays PLC Annual Report 2023 96 Financed emissions - UK Commercial Real Estate 2 ) (Indexed December 2023 = 100) Physical Intensity (kgCO2e/m Dec'23:30.0 △ 2023 2025 2030 2040 CRREM II- 1.5 degree Barclays' progress Portfolio target path Note: Δ 2023 data subject to independent limited assurance under ISAE (UK) 3000 and ISAE 3410. Current limited assurance scope and opinions can be found within the ESG Resource Hub: home.barclays/sustainability/esg-resource-hub/reporting-and- disclosures/ Future progress against this target The general factors outlined on page 89 in relation to progress against our targets will equally be relevant to this portfolio. Additionally, and more specifically, CRE is dependent on broader industry and regulatory changes which are required to deliver the decarbonisation of the UK energy grid, the phasing-out of fossil fuel heating, and the maturity of supply chain to deliver the required retrofit solutions. Regulation and policy advancement will also play a key role, especially in relation to supporting low-carbon heating and setting requirements in relation to EPC standards. These changes are outside Barclays' control and may affect our ability to achieve this target. Further, as the data underlying our model continues to evolve and be refined to address the challenges outlined above, this could impact our metrics and this target. We will continue to engage with clients to understand their approach to the transition and how Barclays can best support – ranging from education to tailored loan solutions. Over the medium term, supporting new residential developments through our Sustainable Residential Development Framework – which enables the classification and tracking of residential development loans to our UK Corporate Banking clients, as well as the deployment of sustainability-linked loans – which will support our housebuilding clients in achieving their sustainability goals including reducing emissions of new homes built. + Read more about the Sustainable Residential Development Framework here: .barclayscorporate.com/ content/dam/barclayscorporate-com/documents/ solutions/corporate-banking-solutions/Green-solutions/ Sustainable-residential-development-landscape.pdf 020406080100120Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 2 High-level assessment of drivers of net zero for UK buildings Driver Barclays' role Barclays PLC Annual Report 2023 97 Decreasing the emissions intensity of Barclays’ UK Housing and UK CRE portfolio is highly dependent on external changes and public policy interventions to deliver the drivers below Improvement in energy efficiency of existing buildings • Continue to offer education, financing products and services to incentivise retrofitting • Advocating for external measures to drive take-up of retrofitting Decarbonisation of UK electricity grid Phasing-out of fossil fuels in heating New homes built to net zero standard Behavioural change • Support Social Housing providers and commercial landlords in their transition journey • Supporting our clients in the Power sector in their net zero transition • Advocating for the UK Government to deliver on its ambitions to decarbonise the electricity grid • Continue to offer education, products and services to incentivise customers switching to low-carbon heating • Continue to promote energy efficiency in new builds through propositions such as Green Home Mortgages • Continue supporting our Corporate Bank's real estate clients in their transition – for example through Barclays' Sustainable Residential Development Framework • Continue supporting our Social Housing providers to provide energy-efficient, affordable new housing (to own and rent) • Continue to offer education to customers on energy efficiency and promote reduction of usage through tools, awareness and partnerships Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 2 UK Housing Financed emissions - UK Housing Widened scope for UK Housing 2 ) (Indexed December 2022 = 100) Physical Intensity (kgCO2e/m Buildings contributed 17% of total UK GHG emissions in 2022, of which residential buildings represented 75% – primarily from the use of oil and gas in heating and hot water. Decarbonising UK homes is a complex challenge that will require widespread engagement and systemic change. In an effort to confront and quantify these challenges we are expanding the scope of our previously announced UK Residential Real Estate convergence point. The expanded scope, renamed to UK Housing sector, now includes Social Housing and Business Banking Real Estate portfolios, alongside the previous scope of Barclays UK residential and Private Banking mortgage portfolios. The real estate portfolios within the UK Housing sector share similar underlying assets – 99% are UK residential properties – thereby referencing the same CCC BNZ pathway and sharing similar decarbonisation levers. Barclays continues to support the UK Housing sector through the provision of mortgages, financing of social housing providers and expanded product offerings designed to support the decarbonisation of the UK Housing stock. Composition of UK Housing portfolio Dec'23 n Barclays UK/Private bank Mortgages n Social Housing n Business Bank Real Estate // Dec'23: 32.1 △ 2022 2023 2025 2030 2040 CCC - Synthetic BNZP Scenario: UK ▲ Portfolio convergence point // Dec 2023 baseline for new UK Housing convergence point Progress in 2023 for previously announced UK Residential Real Estate convergence point Note: Δ 2023 data subject to independent limited assurance under ISAE (UK) 3000 and ISAE 3410. Current limited assurance scope and opinions can be found within the ESG Resource Hub: home.barclays/sustainability/esg-resource-hub/reporting-and-disclosures/ Estimating our financed emissions The decarbonisation of the UK Housing sector in line with the CCC BNZ scenario depends mostly on external changes and public policy interventions. Without these external changes, Barclays cannot materially decrease the emissions intensity of its UK Housing portfolio. Barclays has therefore chosen to identify the 2030 emissions intensity 'convergence point' – and measure our progress towards it – but not to set a formal target at this time. In 2022 we estimated the financed emissions and emissions intensity of our UK Residential Real Estate sector by integrating the PCAF approach into BlueTrack TM . In 2023 the emissions intensity for that sector increased by c.1% due to increased emissions from the UK electricity grid – despite an improvement in known EPC ratings for our Barclays UK mortgage portfolio. Going forwards, the additional portfolios making up the expanded scope of the UK Housing sector will be tracked. We continue to use the CCC BNZ scenario as the benchmark for this sector as it is specific to the UK, independent, developed by a credible institution and aims to achieve net zero emissions for the UK by 2050. We are maintaining a convergence point of a 40% reduction in CO2e emissions intensity by the end of 2030. However, to reflect the expanded scope, this will now be against a 2023 baseline for the UK Housing sector. + Further details on our financed emissions methodology can be found in our latest Financed Emissions Methodology paper at: home.barclays/esg-resource-hub/reporting-and- disclosures/ Barclays PLC Annual Report 2023 98 Drivers of reduction in emissions in UK Housing Key drivers in the transition to net zero in the UK Housing sector are the decarbonisation of the UK electricity grid and the phasing-out of fossil fuels in domestic heating through the switch to low-carbon heating – bringing cleaner energy into our customers' homes. This will largely be driven by the transition of the Power sector alongside UK Government policy to drive the decarbonisation of the UK electricity grid and promote take up of low-carbon heating. Barclays can play a role through supporting renewable energy projects and clients in the Power sector, through Sustainable and Transition Finance activity and through Sustainable Impact Capital investments. Another key driver required to reach net zero in the UK Housing sector is to improve the energy efficiency of existing homes – which includes improving the fabric of homes and adopting other energy efficiency measures. Other key contributors include new homes being built to net zero standard, with low-carbon energy sources and high energy efficiency ratings, and a reduction in energy consumption through changes in behaviour. + Read more about the Barclays-commissioned report from Ipsos UK on consumer retrofitting behaviour on page 112. As a mortgage lender to retail and business banking clients, we can support customers who choose to retrofit their properties, switch to low- carbon heating, and explore ways to reduce their energy consumption by providing financial products, services and partner offers. + Further details on our Greener Homes Propositions can be found on page 111. 164.79.91.7Loan £ bn020406080100120Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 2 Our Social Housing business engages with clients on ESG, including where they are on their transition journey and what we can do to support them. The sector is already demonstrating above- average energy efficiency in portfolios and many housing associations have a stated objective of moving stock to EPC C or better by 2030. Aligned to this objective the sector’s energy efficiency has been improving – and we are seeing examples of deep retrofit projects and newly delivered housing schemes with properties rated EPC band A/B. As an established lender to the Social Housing sector, we continue to be an active market participant, are structuring some of our loans with sustainability metrics where this is within client appetite, and have amended covenant terms we are prepared to accept to support retrofit. However, we expect the overall impact of our actions to be low given the barriers to retrofitting – such as high upfront costs and current low customer demand due to low incentives to change. Additionally, the potential management actions available to Barclays are limited due to this being a portfolio of customers or end users who are retail in nature, and predominantly consisting of residential properties. To see more about Barclays actions with regards to the drivers of net zero for UK Buildings, please refer to the table on page 97 above for details of Barclays' approach to drivers in UK buildings. Our EPC ambition 1 Barclays is expanding its EPC ambition scope to include Social Housing, Business Banking Real Estate and Kensington Mortgage Company 2 Limited , alongside the previous scope of the Barclays UK mortgages portfolio. In line with our efforts to improve the energy efficiency of our UK Housing portfolio, Barclays has set an updated EPC ambition of 55% of properties and collateral in scope of our EPC ambition – with a known EPC to be rated band C or better by 2030. 3 As at the end of Q3 2023, 47.9% of Barclays properties and collateral in scope of our EPC ambition with a known EPC were rated band C or better. There are industry-wide challenges to ensure the properties in our portfolio have EPC certificates, given approximately one-third of housing stock in England and Wales does not have a valid EPC rating. EPC ratings of properties and collateral in scope of EPC ambition4 2023 total: 744,098 18,051 3,601 n EPC rating G n EPC rating F n EPC rating E n EPC rating D n EPC rating C n EPC rating B n EPC rating A 2,227 47.9% of properties and collateral rated A-C of available EPCs Notes 1 EPC ambition scope does not currently include Private Bank due to EPC data reporting limitations. 2 Kensington Mortgage Company Limited is not currently included in UK Housing sector emissions intensity convergence point due to portfolio reporting limitations. 3 Metric based on number of properties and collateral in portfolios that make up the EPC ambition scope as of 31 December 2023. 4 EPC data for Barclays UK mortgages and Kensington Mortgage Company Limited are as of 30 September 2023. Matched EPC data for Social Housing and Business Banking Real Estate are as of 31 October 2023. Barclays PLC Annual Report 2023 99 We intend to build on this assessment to deepen our understanding of the emissions associated with our financing activities. Informed by this work, we intend to consider the most appropriate approach to extend our target coverage with the aim of ensuring it covers relevant areas of the value chain and/or our financing activities. Together, our work to set financed emissions reduction targets as part of our commitment to the NZBA, and to establish a baseline assessment of the emissions associated with our financing activities consistent with the PCAF Standard, will aid our understanding of the extent to which our financing aligns with the goals and timelines of the Paris Agreement. During 2024 we intend to further develop our approach to the implementation of the Transition Plan Taskforce (TPT)'s recommendations – and to include information relating to transition planning in future climate disclosures. As part of this, we intend to develop Sector Transition Strategies aimed at summarising our approach to support the transition in a particular sector. Notes: 1 As defined in Foundations of Climate Mitigation Target Setting published by the UNEP Finance Initiative (unepfi.org/wordpress/ wp-content/uploads/2022/05/Foundations-for-climate- mitigation-target-setting.pdf). 2 With the exception of diversified mining companies where aluminium production is a small element of their overall activities, and where it would therefore be difficult to set standalone aluminium emissions intensity reduction targets. Ongoing work on portfolio alignment As part of our commitment under the NZBA, we 1 have set targets for material high-emitting sectors in our portfolio. TM , we have assessed our Using BlueTrack financed emissions and have targets for eight high-emitting sectors. These targets cover our Energy, Power, Cement, Steel, Automotive manufacturing, Agriculture, Aviation, and CRE portfolios. We have also set a convergence point for UK Housing. We previously assessed financed emissions for Aluminium – and, during 2023, for Shipping – but decided against setting targets. For Aluminium, this was the result of a detailed review of our Metals (Steel and Aluminium) portfolios, which found that Barclays does not have a material 2 . For Shipping, exposure to the Aluminium sector as explained on page 85 in relation to material sectors and net-zero-aligned targets, our assessment identified that due to our limited financing volumes and financed emissions across a small number of clients it would be difficult to set a target at this time. During 2023 we also developed a high-level modelled assessment of the emissions associated with our financing activities across our portfolio, largely aligned to the PCAF Standard – including undrawn commitments, contingent liabilities and capital markets financing. + See section Reducing our financed emissions on page 80. 94,024271,732224,405130,058 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 2 Restrictive policies In addition to setting sector-specific emission reduction targets, consistent with our Purpose and driven by consideration of all relevant risks and other factors, we have set explicit restrictions to curtail or prohibit financing of certain activities in sensitive sectors. These policies are listed below and set out in detail within our statements and policy positions. Our restrictive policies are regularly reviewed and updated in light of the rapidly changing external environment and are informed by engagement with our stakeholders, including shareholders, clients, subject specialists and civil society groups. In 2023 this included a review of nature- related impacts and dependencies and social risks of different technology types to help inform our approach to due diligence. Our Climate Change Statement sets out our positions and approach to sensitive sectors with tightening policy criteria and increasing expectations over time. In 2024 we have updated the Climate Change Statement to include new requirements for upstream oil and gas and restrictions on the type of exposures and risk we will finance going forward, as well as additional restrictions on financing in relation to the Amazon Biome, ultra-deep water and extra heavy oil). For further details on the scope and application of the updated positions please see page 63. Barclays will continue to support an energy sector in transition, focusing on the diversified energy companies investing in low carbon and with greater scrutiny on those engaged in developing new upstream oil and gas projects. The experience of the last few years leads us to recognise that client transition pathways will vary and the ability of our clients to meet our requirements may be affected (positively or negatively) by external factors, including, for example, the public policy and regulatory environment, technological advancement, geopolitical or regional developments, energy security, cost of living and just transition factors. We intend to continue to work with and support our clients as they transition their business and will monitor and engage with them on their progress and the impact of external factors over time, through our Enhanced Due Diligence and Client Transition Framework. We anticipate that companies which are unable or unwilling to reduce or eliminate their emissions consistent with internationally accepted pathways may find it increasingly difficult to access financing, including through Barclays. Further restrictions are set out in our Position Statements relating to Forestry & Agricultural Commodities as well as World Heritage Site and Ramsar Wetlands, which were reviewed in April 2023. In the latter case only minor changes were made. We will continue to keep our policies, targets and progress under review in light of the output of both EDD and CTF reviews, the rapidly changing external environment and the need to support governments and clients, in our efforts to meet our ambition of being a net zero bank by 2050. Position and policy statements on sensitive sectors Climate change Forestry and Agricultural commodities • Timber, pulp and paper • Palm oil • Soy • Beef (new) • Upstream oil and gas (new) • Unconventional oil and gas – Oil sands – Fracking – Arctic oil and gas – Amazon oil and gas (new) – Ultra-deep water (new) – Extra heavy oil (new) • Thermal coal mining • Thermal coal power • Biomass (new) + Further details can be found at: home.barclays/sustainability/esg-resource-hub/statements-and-policy-positions/ Barclays PLC Annual Report 2023 100 Forestry and Agricultural Commodities Statement Barclays recognises the critical importance of addressing deforestation in delivering on global climate and biodiversity goals. A major cause of deforestation is the production of forestry and agricultural commodities such as timber, beef, palm oil and soy, and we have a position statement and due diligence approach that applies to clients involved in these activities (first published in 2019 for forestry and palm oil and refreshed in 2020 to include soy). We have engaged with investors, clients and civil society organisations on this topic, which has informed a review of our Forestry and Agricultural Commodities Statement. This was updated in April 2023 with a number of significant changes. The updated Statement now covers clients involved in South American beef production or primary processing, and enhances the existing requirements for clients involved in soy and palm oil. Among other criteria, the Statement requires that these clients commit to having fully traceable and deforestation-free commodity supply chains by the end of 2025 – a position aligned with industry good practice guidance such as the Accountability Framework Initiative¹ and Agriculture Sector Roadmap for 1.5°C². In addition, the Statement requires that clients prohibit the production or primary processing of soy or beef from deforested areas of the Amazon, in recognition of the critical nature of this biome to biodiversity and climate objectives. Notes: 1 accountability-framework.org/ 2 tropicalforestalliance.org/en/collective-action-agenda/ cop27-roadmap/ + For further information, please see our Forestry and Agricultural Commodities Statement: home.barclays/ content/dam/home-barclays/documents/citizenship/our- reporting-and-policy-positions/Forestry-and-Agricultural- Commodities-Statement.pdf Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 3 Financing the transition In light of the progress made against our previously announced targets, and after a strategic review of the Group's capabilities, market demand and growth opportunities, in December 2022 we announced a new target to facilitate $1trn of Sustainable and Transition Financing between 2023 and the end of 2030. We also announced an extension of our Sustainable Impact Capital portfolio, with a new mandate to invest up to £500m into global climate tech start-ups by the end of 2027. Facilitating $1trn of Sustainable and Transition Financing At Barclays we are clear that addressing climate change is a complex challenge that demands a fundamental transformation of the global economy. Low-carbon technologies, infrastructure and capacity must be scaled up to meet growing energy demands and for the world to reach net zero. The financial sector has an important role to play in supporting the transition and we are determined to play our part. We are deploying financing to help scale-up the necessary activities needed in the transition to net zero. + For further details on climate-related opportunities see page 70. In December 2022 we announced a new target, to facilitate $1trn of Sustainable and Transition Financing between 2023 and the end of 2030. This followed our two previously announced targets: to deliver £150bn of social, environmental and sustainability-linked financing by 2025, which we surpassed in 2021, and to deliver £100bn of green financing by 2030, which we surpassed in 2023. Our $1trn target encompasses the green, social, transition and broader sustainability-linked financing requirements of clients including corporates, governments and the public sector, financial institutions and consumers. This includes financing of climate and environmental solutions including green mortgages, energy- efficient technology and renewable energy, as well as financing for broader social and sustainability work – including sustainability-linked structures and areas such as affordable housing. We are also facilitating funding into green technologies and low- carbon infrastructure projects, as well as using our advisory capabilities, product sets and financial expertise to help our customers and clients realise their own transitions to a low-carbon economy. The inclusion of transition financing in this target reflects our recognition of the importance of supporting the decarbonisation of hard-to-abate sectors that are carbon intensive. In early 2024 we announced our Transition Finance Framework (TFF), which outlines the criteria for transactions to qualify as transition financing and sits alongside our Sustainable Finance Framework (SFF) to define what can be included against this target. + Examples of qualifying transactions can be seen in our case studies on pages 30, 115 and 116. Our ability to meet the $1trn target and progress towards it from year to year will be dependent on a number of factors and variables outside our control. Factors such as market conditions, policy, laws, regulation, geopolitical developments and stakeholder expectations - including approaches to product labelling and regulatory scrutiny of green, sustainability-linked and social products - could impact lending and capital markets appetite and our approach to risk management, and therefore present a risk to our progress against, and delivery of, the target. Barclays PLC Annual Report 2023 101 Additionally, new climate and decarbonisation technologies may scale at varying rates, including being reliant on the supply and demand of raw materials, which may impact financing volumes. We will continue to review and adapt our approach to Sustainable and Transition Financing in response to the evolving market opportunities. Progress against our $1trn target Δ During 2023 we facilitated $67.8bn of Sustainable and Transition Financing, of which $67.4bn was sustainable financing, slightly up on 2022 of $65.3bn, Δ and $0.4bn was transition financing that qualified against our new Transition Finance Framework. Our Δ facilitation of $67.8bn of Sustainable and Transition Financing in a challenging market demonstrates our continued focus on supporting our clients on their sustainability journeys. 1 Bond issuance was the largest product category in 2023, accounting for 76% of total Sustainable and Transition Financing while loans and equity accounted for 19% and 3% respectively. This mix showed a small shift towards bond activity and away from loans compared to the mix of our 2022 sustainable financing of $65.3bn, which comprised 71% bond issuance, 26% loans and 2% equity. Sustainable finance Sustainable financing, aligned to our Sustainable Finance Framework, consists of financing for dedicated use of proceeds, financing for clients with an eligible business mix in relevant environmental and social categories, and sustainability-linked financing which refers to general purpose funding. Social financing Raising finance for clients including supranational, national and regional development Δ institutions was a key driver of the $32.4bn of social financing facilitated in 2023 (2022: $30.0bn). In 2023, we continued to see issuers aligning their financing commitments to social use of proceeds bonds which allocate funds to categories such as access to healthcare, affordable housing and essential services. As in 2022, we have also seen the use of social KPIs within sustainability-linked financing such as targets linked to gender diversity. Environmental financing Δ In 2023, we facilitated $24.1bn of environmental financing (2022: $21.7bn). This performance reflected continued demand from our clients and our strategy to work with them to help facilitate their transitions to a low-carbon economy. Sustainability-linked financing Sustainability-linked bonds (SLBs) and sustainability-linked loans (SLLs) are forward- looking, performance-based debt instruments issued with specific sustainability performance targets. Our sustainability-linked financing Δ totalled $10.9bn in 2023 (2022: $13.7bn). The sustainability-linked market continues to be of importance to both investors and issuers alike who use these instruments to embed their sustainability targets into financing commitments and we look forward to continuing to work with our clients to innovate the product set. Note Δ 2023 data subject to independent limited assurance under ISAE (UK) 3000 and ISAE 3410. Current limited assurance scope and opinion can be found within the ESG Resource Hub: home.barclays/sustainability/esg-resource-hub/reporting-and- disclosures/ Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 3 Transition financing Facilitating £100bn of green financing Δ In 2023, we facilitated $0.4bn of transition financing under our new Transition Finance Framework. While new technologies are still emerging, we are identifying opportunities to finance decarbonisation pathways across high- emitting sectors, including energy, power, chemicals, and metals. We are looking to play a role in supporting a range of carbon and emission reduction projects – from the manufacturing of blue hydrogen and related infrastructure for end-use sectors with limited decarbonisation alternatives, to the electrification of compressor units, resulting in the elimination of natural gas use, as well as the adoption of low-carbon technologies, As emerging technologies scale and continue to develop, we are committed to leveraging our expertise to further identify opportunities for transition financing. + For further details on our Sustainable Finance Framework and Transition Finance Framework see page 104. Since 2018 we have facilitated a total of Δ £113.7bn green financing – exceeding our target of £100bn well ahead of the 2030 target date. Δ In 2023 we facilitated £25.9bn (2022: £25.5bn), comprising: • Labelled use of proceeds and general purpose financing in environmental categories of £19.8bn (2022: £18.0bn) Δ • Sustainability-linked financing that incorporates environmental performance Δ (2022:£7.5bn). targets of £6.2bn Breaking down our green financing by product type, the largest category in 2023 was bond issuance – accounting for 63% of the total (2022: 61%). Loans and equity made up 30% (2022: 33%) and 6% (2022: 4%) respectively. Notes 1 Bond issuance includes Bonds (DCM), CMBS, Securitization, Munis and PCM Debt. Δ 2023 data subject to independent limited assurance under ISAE (UK) 3000 and ISAE 3410. Current limited assurance scope and opinion can be found within the ESG Resource Hub: home.barclays/sustainability/esg-resource-hub/reporting-and- disclosures/ Barclays PLC Annual Report 2023 102 We continue to drive wider commercial and strategic opportunities for Barclays UK, Corporate Banking and Investment Banking with those companies. We continue to focus on decarbonisation technologies supporting transition within carbon-intensive sectors, particularly where Barclays has meaningful client exposure – such as Power, Industry, Transport, Agriculture and Real Estate – including solutions delivering carbon capture, carbon dioxide removal and green hydrogen. Sustainable Impact Capital portfolio: Mandate to invest up to £500m into global climate technology start-ups We firmly believe that innovation is key to tackling climate change and we are committed to supporting transformative change by investing our own capital in entrepreneurial companies. In 2020 Barclays announced that it would invest up to £175m equity capital in environmentally focused climate technology companies by 2025 – helping support our clients to transition towards a low-carbon economy, scale solutions to environmental challenges, and fill their growth-stage funding gaps. In evidence of the success of the investments, in December 2022 we announced an increase of the investment mandate to invest up to £500m by the end of 2027. To date we have invested £138m into 21 innovative companies. These investments have supported many aspects of climate tech innovation, from property retrofit solutions to long-duration energy storage and hydrogen technologies. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 3 Sustainable finance dashboard $1trn Sustainable and Transition Financing facilitated (2023-2030)* Annual breakdown by category Annual breakdown by region ($bn) 2023 2022 ($bn) 2023 2022 Barclays PLC Annual Report 2023 103 Achieved to date $67.8bnΔ Annual breakdown by product ($bn) 2023 2022 n Environmental n Social n Sustainability-linked n Transition n Americas n UK/Europe n Asia and Rest of World n Bonds n Equity n Loans n Investments n Other (Contingent) £100bn green financing facilitated (2018-2030) Breakdown by year (£bn) 2023 2022 2021 2020 2019 2018 Breakdown by region (£bn) 2023 2022 2021 2020 2019 2018 Achieved to date £113.7bnΔ Breakdown by product (£bn) 2023 2022 2021 2020 2019 2018 n Environmental n Sustainability-linked (green) n Americas n UK/Europe n Asia and Rest of World n Bonds n Equity n Loans n Investments n Other (Contingent) Notes Δ 2023 data subject to independent limited assurance under ISAE (UK) 3000 and ISAE 3410. Current limited assurance scope and opinions can be found within the ESG Resource Hub * FY 2022 financing figures are provided only to facilitate comparison and do not count towards the target. FY 2022 numbers are converted based on year-end FX closing (spot) rate. + For further details: home.barclays/sustainability/esg-resource-hub/reporting-and-disclosures/ + Further details of the data provided, including further granularity of decimal points can be found in the ESG Data Centre located within the ESG Resource Hub at home.barclays/sustainability.esg-resource-hub/reporting-and-disclosures/ 24.1△32.4△10.9△0.4△21.730.013.722.938.96.023.937.14.451.32.012.91.646.11.517.20.019.8△18.022.614.87.85.36.2△7.57.22.81.40.36.57.112.77.93.32.317.816.814.79.05.03.01.71.72.40.70.90.316.415.618.912.27.0 4.8 1.50.94.41.50.10.37.28.36.23.82.1 0.60.90.7 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 3 Barclays' Sustainable and Transition Finance Frameworks Sustainable Finance Framework We seek to be transparent about our approach to reporting against our sustainable finance targets. Our sustainable financing is tracked using the methodology set out in the Barclays Sustainable Finance Framework (SFF). This framework defines the criteria we use for social financing, sustainable financing, green financing and sustainability-linked financing. This includes ‘dedicated purpose’ green and social financing, ‘general purpose’ financing based on eligible company business mix and sustainability-linked financing, and sets out applicable criteria drawing on industry guidelines and principles. It should be noted that the methodology is reliant on a range of data sources including Dealogic and Bloomberg transaction listings and league tables, as well as other third-party data and verification sources including company disclosures to aid the classification of financing into eligible green and social categories. We recognise that the quality, consistency and comparability of the data relied upon is not yet of the same standard as more traditional financial metrics and presents an inherent limitation to the performance reported. We will continue to review available data sources and enhance our methodology and processes to improve the robustness of the performance disclosed. The legal and regulatory landscape relating to sustainable financing – including the naming and categorisation of products as ‘green’, ‘social’, ‘sustainability-linked’ and otherwise – is rapidly evolving with differing regulations across jurisdictions. We may wish to revisit our approach in that context in the future. There is currently no globally accepted framework or definition (legal, regulatory or otherwise) governing what constitutes 'ESG', 'green', 'sustainable', or similarly labelled products – nor is there unanimous agreement on what attributes a particular investment, product or asset should have to be labelled as such. Furthermore, no assurance can be given that a globally accepted definition or consensus will develop over time. We will continue to monitor and comply with applicable jurisdictional regulatory taxonomy definitions and product labelling obligations as they emerge. As innovation in sustainable finance continues to accelerate, we will continue to review and update our SFF, our measurement of our performance against targets, and keep our general approach under review. We have updated our SFF to version 4.1, published in February 2024, which will apply to financing volumes from January 2024 tracked against our target to facilitate $1trn of Sustainable and Transition Financing between 2023 and the end of 2030. + Barclays' Sustainable Finance Framework can be found online in our ESG Resource Hub at: home.barclays/ sustainability/esg-resource-hub/reporting-and-disclosures/ Barclays PLC Annual Report 2023 104 Transition Finance Framework Our transition financing is tracked using the methodology set out in the Barclays Transition Finance Framework (TFF). Barclays has developed and published in February 2024 the first version of the TFF for classifying financing as 'transition' for the purpose of tracking and disclosing our performance against our target to facilitate $1trn of Sustainable and Transition Financing between 2023 and the end of 2030. The inclusion of transition financing in this target reflects our recognition of the importance of lending, facilitating funding and investing in technologies and activities that support GHG emissions reduction, directly or indirectly, in high-emitting and hard-to-abate sectors. The TFF is complementary to our Sustainable Finance Framework, The TFF augments the scope of Barclays' SFF and determines the eligibility of transition activities that sit outside the sustainable finance already covered by the SFF. As there is no universal consensus as to how to define 'transition' activities, Barclays has developed its own definition of transition finance as follows: Our definition of transition finance Transition finance is any financing including lending, capital markets and other financing solutions provided to clients for activities – including technologies – that support GHG emissions reduction directly or indirectly in high-emitting and hard-to- abate sectors towards a 1.5°C pathway. The TFF outlines the criteria for eligible transactions with a set of defined principles to guide us in the application of our definition of transition finance as we support high-emitting clients and finance real economy decarbonisation. As innovation and market principles in relation to transition finance continue to accelerate and evolve, we will continue to consider and develop our definition of transition finance and the coverage under the TFF. + Barclays' Transition Finance Framework can be found online in our ESG Resource Hub at: home.barclays/sustainability/esg- resource-hub/reporting-and-disclosures/ Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) Barclays PLC Annual Report 2023 105 TCFD Strategy Recommendation (b) | Strategic Pillar 3 Financing nature As we execute our sustainable finance strategy, we aim to identify opportunities to play a role in supporting the financing of nature – in particular by bringing together our combined retail, corporate and investment banking activities. In 2023 we identified the opportunity for Barclays to contribute to the goal of a nature-positive food system as one of three strategic themes during the development of our Group sustainable finance strategy. Although our financing activities in relation to nature may still be relatively nascent, we are aiming to expand on these and have provided some examples of progress made and initiatives developed in 2023 below. Supporting soil through technology investment Regenerative agricultural practices have significant potential to support climate change mitigation and enhance the resilience of food value chains through improved soil health. Accurate measurement of soil carbon is a factor constraining the growth of regenerative practices in UK agriculture, where Barclays has a strong presence. The market for scalable, high-accuracy soil carbon measurement is nascent, with several early-stage companies pioneering new technologies. In Barclays UK we believe nature is a key area where we can make an impact, due to our prominent role in financing UK agriculture and agricultural land purchases. During the past year we have lent funds to customers to purchase land for deployment under the Biodiversity Net Gain scheme, and supported a leading wilding estate in commercialising its activities as it prepares for future sales from nature-positive outcomes. We also support farmers who seek to apply more sustainable farming practices, and have been actively investigating how we can support farmers to safely access private nature markets. Finally, Barclays Eagle Labs is supporting a Venture Launchpad cohort run by Carbon13 – focused on Land, Food and Nature. In 2023 SIC invested in Agricarbon, a UK- based company that has developed market- leading soil carbon measurement technology, to support the growth of regenerative agricultural practices. Agricarbon’s end-to-end measurement process – which involves automating lab- based processes, including elemental analysis – addresses the gap in the market for scalable, high-accuracy soil carbon measurement. Agricarbon has grown rapidly since its commercial launch in 2021, and the company already serves an international client base including some of the world’s largest food and beverage companies, carbon project developers, and natural capital asset managers. With the proceeds from the fundraising, Agricarbon is seeking to accelerate its international expansion. We are supporting environmentally focused start-ups through our Sustainable Impact Capital (SIC) portfolio, led by Barclays’ Principal Investments team – which has a mandate to invest up to £500m by the end of 2027 in the equity of these companies, which target the goals and timelines of the Paris Agreement. We are also actively developing nature-related products and solutions to support our clients in the Corporate and Investment Bank. In 2023 we strengthened our coverage of Agriculture and AgTech companies through a senior hire in our Sustainable and Impact Banking team. We are also exploring other innovative financial structures that can redirect financing at scale towards nature, such as debt for nature swaps. In addition to client offerings, we have also identified the need to build institutional capacity to enable us and the broader industry to tackle the technical challenges involved in scaling financing towards nature-based solutions. + The full Financing Coastal Nature-based solutions document can be found at this link a.storyblok.com/ f/109506/x/6298e4ed77/2023-11-22_fstf-financing- coastal-nbs-report_final.pdf Further details on the SMI can be found on page 127. Financing coastal nature-based solutions document The Sustainable Markets Initiative (SMI) Financial Services Task Force ( FSTF) is a group of CEO-level executives from some of the world’s largest banks. It brings together financial services leaders to develop and enable solutions that aim to help facilitate the transition to sustainable markets and support the rapid decarbonisation required across the real economy. Barclays is a member of the FSTF and this year, alongside HSBC and with support from Pollination, developed the Financing Coastal Nature-based Solutions (NbS) document. The document serves as a practitioner’s guide to building awareness and addressing key potential considerations for embedding coastal NbS in financial structuring. The guide identifies key considerations for financing coastal NbS projects in terms of commercial viability, risk mitigation and impact reporting through practical case studies, including a carbon credit project and debt conversion structures. The guide was produced as a foundational resource for building institutional capacity to understand coastal NbS within the context of the financial services industry. We expect the points raised in the guide, which includes the role of different asset classes in shifting capital towards coastal NbS, to evolve, incorporating the latest trends in coastal NbS financing. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) Barclays PLC Annual Report 2023 106 TCFD Strategy Recommendation (b) | Strategic Pillar 3 How our sustainable financing supports the Sustainable Development Goals (SDGs) The 2030 Agenda for Sustainable Development, adopted by all United Nations Member States in 2015, provides a shared blueprint for peace and prosperity for people and the planet – now and into the future. At its heart are the 17 SDGs, which are a call for action by all countries – developed and developing – in a global partnership. Barclays is pleased to play its part, working in partnership with our stakeholders to support the delivery of the SDGs. Since 2018 we have tracked our annual contribution to the SDGs through our financing activities. An illustrative breakdown of how our social and environmental financing contributes to the SDGs is provided in the chart opposite. Our financing covers a range of activities including debt and equity capital markets, corporate lending, trade finance and consumer lending. It helps to generate positive social and environmental outcomes through financing of activities such as, but not limited to, energy efficiency, renewable energy, affordable housing, basic infrastructure and services. Financing of activities set out in our SFF in turn supports progress towards achieving the SDGs. For a full list of eligible social and environmental activities see the SFF, which shows how eligible social and environmental activities contribute to individual SDGs – supported through an analysis of the underlying SDG targets. As we evolve our understanding of how our financing contributes to the SDGs, we will refine our methodology accordingly. SDG illustrative breakdown of 2023 social and environmental financing 6.5bn 4.1bn 4.1bn 0.2 4.0bn 4.0bn 0.2 0.1 n No poverty n Zero hunger n Good health and wellbeing n Quality education n Gender equality n Clean water and sanitation n Affordable and clean energy n Decent work and economic growth n Industry, innovation and infrastructure n Reduced inequalities n Sustainable cities and communities n Responsible consumption and protections Note: Includes 2023 social and environmental financing and excludes sustainability-linked financing. n Climate action n Life below water n Life on land n Peace and Justice Strong Institutions n Partnerships for the goals Beyond our financing activities, our community programmes contribute to Goal 8: decent work and economic growth. We also contribute to the SDGs through our work implementing the UN Principles for Responsible Banking (PRB), and continue to analyse the potential positive and negative impacts of our business through these principles. Barclays has set targets in line with some of our significant impact areas to drive alignment with the goals and timelines of the Paris Agreement and to contribute to the SDGs. + For further details, our PRB disclosure can be found online in our ESG Resource Hub at: home.barclays/sustainability/esg- resource-hub/reporting-and-disclosures/ 4.12.64.03.50.92.26.54.13.74.03.82.50.82.2 Barclays PLC Annual Report 2023 107 Products and services We support a wide range of customers and clients – from individuals and small businesses through our consumer and business banking services, to mid-sized and larger businesses and institutions, including governments, through our corporate and investment banking services. Barclays' position in the market, offering retail, corporate and investment banking services, provides us the opportunity to deliver an end-to- end proposition – offering innovative products and solutions to meet our clients' needs using the power of One Barclays. Through collaboration with our colleagues across businesses, we have built capabilities to help support the innovation needed to make the transition a success. For example, through our climate-technology escalator we provide support for scaling early-stage companies through tailored, specialist support at each stage of their development from idea to IPO. This helps to ensure these companies can access capital as they grow, for example through our Sustainable Impact Capital mandate and network of accelerators, our corporate bank and via the capital markets. During 2023, reflecting on engagement with and feedback from our clients, we continued to build the expertise and knowledge that clients are looking for as they scale their businesses and transition to a low-carbon economy. This included: • Continuing to strengthen our dedicated teams, capabilities and propositions supporting businesses developing and scaling the technologies that will help the world reduce emissions • Providing the finance to scale-up the infrastructure and capacity to deliver the renewable energy the world requires • Enhancing our teams through specialist hires in areas including sustainable project finance, ESG ratings advisory and carbon trading, as well as tailored sector training focused on decarbonisation pathways. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 3 Working with our clients We want to be by our clients' side as they transition their businesses to operate in a low-carbon economy. We are working on expanding our sustainable finance offering through our specialist teams to help clients navigate this period of extraordinary change. Engaging clients through business and events We believe the transition to a low-carbon economy is a defining opportunity for innovation and growth – and that we can make the greatest difference by supporting and engaging with our clients as they transition, using our advisory and financial expertise to help them navigate this period of extraordinary change. As trusted advisers we continue to proactively engage with our clients on the risks and opportunities for their businesses arising from the transition to a low-carbon economy. This includes working with climate technology companies across their stages of development, and with larger, established and/or higher- intensity clients on their transition journeys. We support clients executing their climate strategies, including supporting the facilitation of initial public offerings for climate-focused growth companies, acquisitions of emerging climate technology start-ups to diversify incumbent clients’ business models, and financing to mobilise the decarbonisation of operational activities. By way of example of the extent of our engagement, over the course of 2023 we had over 17,500 (2022: 15,000) engagements with clients within the Corporate Bank on ESG topics, thanks to focused efforts by relationship teams to raise ESG topics proactively. We also held numerous client events on ESG and sustainability topics, including our inaugural flagship Sustainable Finance Conference in New York with an attendance of over 400 people. Engaging clients through our Client Transition Framework The CTF, as outlined on page 90, supports us to direct our engagement efforts towards clients that are most exposed to the risk of failing to transition in line with the sectoral pathways reflected in our targets. This is informed by the outcomes of CTF assessments, allowing us to be targeted in our engagement efforts and provide clients with clear communication on our expectations for transition planning. It also helps inform our advice on how clients best take advantage of transition finance opportunities. + Further details on our Client Transition Framework on page 90. Engaging clients through research We provide thought leadership to support our clients using our in-house ESG Research capability. Clients who have access to our research publications tell us it prompts greater evaluation of their business needs – and we have seen a number of instances of this leading to broader conversations about the transition to a low-carbon economy, the ways investors can support the transition, and the ways Barclays is on hand to support. In 2023 we published over 475 ESG-focused research reports. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 108 Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 3 Products and services offered across our client base Consumer Small and growth stage Entrepreneur and Innovation programmes Mid-size corporates Large corporates and governments Investors Barclays is working to champion innovation and enable sustainable growth – bringing new ideas to life is central to the way we support people, businesses, communities and the wider economy. Barclays UK Consumer and Business Banking Corporate and Investment Bank Engaging with our retail customers and businesses to develop sustainability-related solutions that meet the needs of our customers and clients. Barclays UK Consumer Sustainability Hub Engages consumers through our online Consumer Sustainability Hub to provide information on financial products, services and partner offers that may support them in making more sustainable choices. Green Home and Buy-to-let Mortgages Greener Home Reward Mortgage offering lower interest rates for new-build properties with an EPC rating of A or B. Cash reward of up to £2,000 for eligible residential mortgage customers who install eligible energy-efficiency- related measures in their homes. Green Asset Finance Fixed rate on range of eligible green assets, supporting clients to transition their business towards net zero. Green Barclayloan for Business No arrangement fees on a range of eligible green assets, supporting clients to transition their business towards net zero. Blending the existing expertise and relationships in our coverage groups with new, specialised teams focused on sustainable finance growth areas – providing enhanced and integrated solutions for our clients. Energy Transition Group Provides clients with integrated strategic advice and financing solutions through the energy value chain as they transition to a low-carbon economy. The Group supports companies in their energy transition through the adoption and implementation of renewables, biofuels, carbon capture, hydrogen energy, renewable natural gas, sustainable aviation fuel, batteries and solar technologies. Sustainable Banking Group Provides a tailored approach to sustainability coverage, advice and execution across M&A, risk management, equity and debt. Sustainable Project Finance Group Provides project financing solutions for clients aiming to decarbonise their businesses, accelerate the deployment of low-carbon technologies and monetise the associated revenue. Sustainable Product Group Provides origination and structuring of green and sustainability-linked corporate banking products across lending, trade finance and liquidity products. Private Bank and Wealth Management Responsible investing and sustainable investing solutions ESG integration and dedicated sustainable investment strategies. Barclays WM&I now offers most Global Access Funds as Article 8 products in a bid to promote sustainability as part of SFDR. Global Markets Provides ESG integration across a wide range of investment solutions, spanning Quantitative Investment Strategies (QIS), Equity or Credit Structured Solutions and Funds. Green & Social Notes programme Issuance of green notes to fund assets efficiently. Treasury Green Programmes Managing financial sustainability and advancing climate strategy through executing principal transactions. Sustainable Impact Capital Green Bond Investment portfolio Investing up to £500m into global climate technology companies by the end of 2027, helping accelerate our clients’ transition to a low-carbon economy. Purchase of green bonds through Barclays’ liquidity pool. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 3 Entrepreneur and innovation programmes Strategic initiatives Initiative Goal Through the Group Innovation Office, Barclays works to collaborate with innovative start-ups – bringing new ideas to life and enabling sustainable growth, supporting individuals, businesses, communities, and the wider economy. Barclays' open financial technology (fintech) innovation strategy is focused on sourcing ideas, technology and talent outside the Bank and supporting its adoption and dissemination within Barclays. Addressing climate change and the transition to net zero is a complex challenge. It will require innovation to drive real-world decarbonisation. The Group Innovation Office works to leverage its innovation capability and wider programmes of fintech initiatives to support the delivery of the Barclays Climate Strategy – and to contribute to the growth of Climate FinTech as a sub-sector of fintech under Rise, created by Barclays. The Group Innovation Office believes Climate FinTech has the potential to make the transition to a low-carbon future simpler, easier to implement and more affordable. Rise Start-Up Academy Rise Growth Academy Experimentation Hub Eagle Labs * Unreasonable Impact 250 founders supported by the end of 2025 50 fintechs supported by the end of 2025 30 rapid vendor evaluations by 2025 Provide up to 1,500 mentorship hours, 17 Growth Programmes and one Ecosystem Partnership Programme in 2024 Support an additional 200 businesses solving social and environmental challenges from 2023-27 + Further details on Barclays' Innovation can be found at: home.barclays/who-we-are/innovation/ * Further details on Eagle Labs found on page 112. Barclays Rise Rise, Barclays' global fintech platform, seeks to create the ultimate conditions for innovation and growth in financial services, including Climate FinTech. Since 2015 Rise has focused on building a global community of the best minds in fintech to disrupt, challenge and confront the way things are done in our industry. Spotlight: Nossa Data Rise Resident and Barclays Accelerator Alumni Nossa Data is aiming to change ESG reporting and data management by providing technology for non-financial corporate disclosure. This female-founded Climate FinTech business is collectively supporting companies in measuring and improving their ESG performance in order to meet increasing regulatory requirements. Barclays Rise Start-Up Academy The Rise Start-Up Academy helps early-stage fintechs, supporting emerging founders with skills and tools to help them get from proposition to launch. The programme supports refining their minimum viable product (MVP) through weekly activities and live workshops. A Climate FinTech special edition of the Rise Start-Up Academy will launch in 2024 to support this growing category of fintech. Barclays PLC Annual Report 2023 109 Our commitment to support 250 founders by the end of 2025, compared to our original target of 750, reflects the challenging economic and investment climate for start-ups, and also our intention to focus our support on companies that are more closely aligned to Barclays’ strategic priorities, including climate and sustainability. Barclays Rise Growth Academy The Rise Growth Academy helps scale high- growth fintechs, including Climate FinTechs, and transition their founders into CEOs with a 10- week, digital-first curriculum with coaching, Managing Director/Director mentorship and access to a community. Participants may also be considered for a potential strategic investment. + Further details on Barclays Rise and its programmes can be found at: rise.barclays/ Climate FinTech Climate FinTech is a category of fintech supporting climate change mitigation and adaptation, and can be used to align and strengthen incentives across all stakeholders. Pioneering Climate FinTech start-ups have the potential to help make low-carbon solutions easier to adopt for individuals and businesses. Our 'Climate FinTech: An Innovation Thesis' will be published to showcase the role that Climate FinTech can play in tackling the challenges faced by consumers, businesses and industry – outlining the opportunity identified to support this sector to scale. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 3 Spotlight: GreenArc Unreasonable Impact GreenArc, a participant of the Rise Growth Academy 2023, is an impact analytics fintech that uses advanced AI techniques to help financial institutions measure and maximise the social and environmental impact of their investments. Investors are demanding greater accountability and transparency to address the growing concerns over the validity of sustainable finance, an industry concerned with claims of greenwashing, and thus a robust, data-driven impact measurement system will help enable financial institutions to credibly assess and report the impact of their investments. Barclays Experimentation Hub The Barclays Experimentation Hub – a business and technology sandbox-as-a-service offering – enables business units across the globe to rapidly test and evaluate third-party vendor solutions, while also providing a platform to influence industry through collaborative events and hackathons. Since 2022 the Experimentation Hub has enabled Barclays to explore new technologies such as Generative AI, while also bringing together industry experts across topics such as digital currencies – exploring the application and business benefits of key innovations within technology and fintech. Experimentation has also supported Barclays teams in keeping pace with the rapidly changing landscape within ESG technologies and will continue to support Barclays' Climate Goals throughout 2024. Through its Unreasonable Impact programme, a partnership between Barclays and Unreasonable Group which was renewed in 2023, Barclays has supported over 300 high-growth entrepreneurs that seek to address pressing social and environmental challenges by connecting them with a network of mentors and industry specialists, including experts from across Barclays. Through regional accelerators, at which the entrepreneurs can engage with this network, and other virtual and in-person events, the Unreasonable Impact programme is designed to help participating entrepreneurs to build strategic relationships and quickly solve key challenges facing their business in order to help them scale. After achieving its goal to support 250 ventures by the end of 2022, Barclays will support an additional 200 entrepreneurs over five years through the Unreasonable Impact programme. With billions in financing already raised by the companies that have participated in the programme, the partnership’s momentum continues to grow – and the ventures are driving innovations in a variety of industries from food and agriculture to energy and manufacturing. Barclays has also invested its own capital into eight Unreasonable Impact companies through 1 its Sustainable Impact Capital mandate, including Airex – creators of a smart air brick – and Brill Power, which has developed battery management technology that aims to extend battery life and throughput. Note: 1 Further details on Sustainable Impact Capital found on page 117. + Further details on Unreasonable Impact can be found at: home.barclays/sustainability/supporting-our-communities/ unreasonable-impact/ Barclays PLC Annual Report 2023 110 Partnering with SaveMoneyCutCarbon SaveMoneyCutCarbon (SMCC) is an organisation focused on simplifying energy, water and carbon reduction. It seeks to save businesses time and money and help them achieve their sustainability goals by providing a range of services. Alongside the installation of products, these services include providing advice and education as well as performing building audits to help uncover savings opportunities and developing project plans to help businesses realise these savings. Barclays is helping companies like SMCC to scale through its Unreasonable Impact partnership – and by investing equity capital in SMCC through the Barclays Sustainable Impact Capital mandate. In addition, Barclays Corporate Banking clients can utilise SMCC’s services to help them pivot their own operations to more sustainable practices. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) Consumer Bank Barclays UK Consumer Sustainability Hub Barclays UK engages consumers through our online Consumer Sustainability Hub, which provides information on financial products, services and partner offers that may support them in making more sustainable choices. In 2023 we began adding links to the Consumer Sustainability Hub in the Barclays app to further support customer engagement on this topic. We plan to create a dedicated in-app Sustainability Hub to host educational sustainability-related content, products and offers. + Further details on the consumer-facing Sustainability Hub can be found at: barclays.co.uk/sustainability/ Greener home propositions Barclays UK is supporting retail mortgage customers' transition to a more sustainable way of living, providing products and propositions focused on retrofitting. In 2023 we rolled out training on home energy efficiency and climate risk to our mortgage advisors, and hosted a webinar for mortgage brokers with retrofitting industry experts. In collaboration with British Gas, we launched an offer of 50% off the purchase of a Hive Thermostat Mini for eligible residential mortgage customers. + Further details on Barclays Hive Thermostat Mini offer can be found at: barclays.co.uk/sustainability/greener-homes/ hive-thermostat-mini/terms-and-conditions/ TCFD Strategy Recommendation (b) | Strategic Pillar 3 Barclays UK Consumer and Business Banking We are engaging with our retail and business customers to better understand the steps they want to take to become more sustainable – and the role finance can play. We are using this insight-led approach to design and develop sustainability-related products, offers and initiatives that meet the needs of our customers. Throughout 2023 we have used new digital journeys in-app and online banking to support an additional 1.9 million customers to become paperless and reduce their paper waste by eight million envelopes. In 2024 we will continue our work to encourage further adoption of paperless banking and digitisation of communications, further reducing paper volumes. In 2023 we made a number of important hires to build our sustainability leadership team in Barclays UK. These colleagues will help drive our client propositions and position us well to drive the strategy in 2024. We continue to upskill and engage colleagues on sustainability issues to build our capability, encouraging colleagues to integrate sustainability considerations into their work supporting customers. This includes tailored training for our Consumer Bank and Business Bank colleagues, introducing our Sustainability Champions community to bring together our most engaged colleagues and launching our online Colleague Sustainability Hub to share educational sustainability-related content. Barclays PLC Annual Report 2023 111 We continue to support customers purchasing EPC A- and B-rated new-build homes with our Green Home Mortgage, following its expansion to include buy-to-let properties in 2022. In 2023 we lent £845m to Green Home Mortgage customers. Since inception in 2018, Barclays UK has lent over £3.5bn to Green Home Mortgage customers. Green Home Mortgage completions Number of completions n 2023 progress n Total since 2018 Value of completions (£m) n 2023 progress n Total since 2018 + Further details on Barclays Green Home Mortgages can be found at: barclays.co.uk/mortgages/green-home-mortgage/ Further details on Barclays Green Buy-To-Let Mortgages can be found at: barclays.co.uk/mortgages/green-buy-to-let- mortgage/ Exploring home energy efficiency with British Gas In partnership with British Gas, we ran an energy efficiency exhibition in the Plymouth city centre branch to help local customers explore ways they could make their homes more energy efficient. The ‘Exploring Home Energy Efficiency Exhibition’ ran for six weeks between October 2023 and December 2023, showcasing some of the technology that could help customers improve the energy efficiency of their home and potentially help lower their bills. Each week focused on a different energy efficiency theme, including low-carbon technology, retrofitting and the financial support available to households. Customers were able to learn and engage through weekly interactive sessions and Q&A panels made up of speakers from British Gas, Barclays and others. To coincide with National Green Careers Week in November, Plymouth City Council ran a series of carbon literacy events for career changers, job seekers and schools in the branch – and customers had the opportunity to take part in a ‘green careers fair’ to understand what a net zero career could look like for them. 3,71915,6698453,563 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 3 Barclays UK Greener Home Reward In 2023 we extended registrations for the Greener Home Reward scheme, which offers a cash reward of up to £2,000 for eligible residential mortgage customers who install eligible energy-efficiency-related measures in their homes using a registered TrustMark installer. We have seen continuing interest in microgeneration, with 45% of applications so far for solar panels and solar battery storage. However, demand for the offer remains limited. This exemplifies the challenges the sector faces to increase the take up of retrofitting. Retrofit types at registration Solar energy Doors and windows Low-carbon heating Insulation Solid wall insulation n Solar energy n Doors and windows n Low-carbon heating n Insulation n Solid wall insulation + Further details on Barclays Greener Home Reward can be found at: barclays.co.uk/mortgages/greener-home-reward/ Barclays UK is also committed to working collaboratively with the UK Government to encourage and inform the development of strategies and policies to drive more energy- efficient homes and retrofitting – including through industry groups where appropriate, and through our own engagement with policymakers. Customer retrofitting research and parliamentary roundtable Retrofitting homes with the aim of reducing carbon emissions in line with UK net zero targets is a challenge Barclays believes requires a collaborative response. In September 2023 we convened a roundtable in Parliament with representatives from UK Government, consumer groups, industry and academia to discuss a Barclays- commissioned report from Ipsos UK on consumer retrofitting behaviour. The report identified potential barriers to action among ‘able to pay’ homeowners who could potentially undertake retrofitting to increase the energy efficiency of their property. The report made a series of recommendations to improve uptake of retrofitting due to limited levels of this activity currently. There was agreement among roundtable representatives that there is a significant awareness gap that could be addressed by promoting the benefits of retrofitting and improving access to practical guidance. However, there were a range of views on how to share the burden of responsibility for these actions – with a number of attendees, including Barclays, underlining the important role for bolder UK Government leadership and policy to drive behaviour change. Business Bank Barclays continues to support Business Bank clients to understand the case for sustainability, recognising that clients are at varying stages of their transition to net zero. Embedding sustainability across the Business Bank We continue to build our net zero expertise to give eligible businesses that bank with us the chance to explore the options available to them as part of transition plans towards net zero. In 2023 we provided sustainability training for Business Bank colleagues, including Real Estate, Agriculture and Specialist Client Solutions teams. For clients that prefer to self-serve, we created a series of educational videos to raise awareness of themes relating to the transition to a low- carbon economy. In 2023 we launched an EPC dashboard to enable Real Estate Relationship Managers to provide a view of EPC ratings across a clients’ portfolio with Barclays UK – and use it to discuss potential benefits around EPC improvements. In July 2023 we expanded our existing Asset Finance proposition via our partner Propel to offer fixed rates on a wider range of green assets including new fully electric vehicles, solar photovoltaic panels, battery storage units, LED lighting, heat pumps and electric vehicle charging points. In September 2023 we launched our Green Barclayloan for Business, which offers no arrangement fees for lending above £25,000 on a range of eligible green assets – supporting our business clients in their transition to net zero. Barclays PLC Annual Report 2023 112 External engagement In 2023 we joined the Broadway Initiative and sit on the advisory board for the UK Business Climate Hub, which will help facilitate net zero support for our clients. To recognise the positive impact of ESG- focused entrepreneurs on the wider economy, the ‘Sustainability Award’ category for the Barclays Entrepreneur Awards was awarded for the second time in 2023 – attracting over 100 applications. Barclays Eagle Labs Barclays Eagle Labs look to help incubate, inspire and educate UK founders, start-ups and scale- ups and help them to succeed and grow. Its growing network already supports businesses through 37 physical sites, as well as virtually across the UK. ¹ 13,812 Total businesses supported by Eagle Labs through propositions, programmes, and businesses engaged with the ecosystem since 2015 + Further details on Barclays Eagle Labs can be found at: labs.uk.barclays 45%22%16%14%4% Barclays PLC Annual Report 2023 113 Carbon13 Venture Launchpad in partnership with Barclays Eagle Labs Carbon13 is a Cambridge-based, globally focused venture builder. Eagle Labs have partnered with Carbon13 to develop a Venture Launchpad to help pre-seed and early-stage businesses launch high-potential and global-impact climate tech ventures. The first Carbon13 Venture Launchpad programme brought together 22 companies focused on innovation in the built environment. From April 2023 to October 2023, founders were supported to help set each of their businesses on a trajectory to mitigate 10 million tonnes of CO2e at scale. Seven programme participants each received funding of £120,000 from Carbon13 – including digital twins for building performance optimisation and new systems for transporting chilled goods. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 3 Eagle Labs climate tech Eagle Labs is building a community of climate tech startups working on disruptive technology to deliver a more sustainable future. In October 2023 the Cambridge Eagle Lab was relaunched as a centre for climate tech start-ups and scale-ups. The lab has been retrofitted to improve energy efficiency in line with Barclays' net zero ambition – including hybrid solar technology generating both electricity and heat provided by Naked Energy, a company supported through our Unreasonable Impact programme and Barclays’ Sustainable Impact Capital. + Further details on our Unreasonable Impact programme can be found here home.barclays/sustainability/supporting-our- communities/unreasonable-impact/ Further details on our Sustainable Impact Capital programme can be found here home.barclays/sustainability/ addressing-climate-change/financing-the-transition/ sustainable-impact-capital/ Digital Growth Grant In 2022 Barclays Eagle Labs was awarded a c. £12m Digital Growth Grant by the UK Government, to support technology businesses across the UK. Over a two-year period, commencing from April 2023, the grant will amplify Barclays Eagle Labs' overall ambition to support the growth of up to 22,000 UK tech start- ups and scale-ups. Since April’s launch, Barclays Eagle Labs have opened applications for 12 dedicated growth programmes – including the Black Venture Growth Programme, the Female Founder Accelerator and the Sustainability Bridge. ² 849 Total businesses supported through Digital Growth Grant Programmes as of December 2023 Notes 1 Covering all businesses supported by Eagle Labs through propositions, programmes, and ESE since 2015 (as of December 2023). 2 Sum of cohort sizes of the programme that have closed for applications (as of December 2023). Advancing Net Zero in the built environment with Sustainability Bridge Through our Sustainability Bridge programme, we are bringing together 29 startups and nine corporates to support the transition to net zero in the built environment – with a specific focus on retrofit and energy efficiency. Corporates on the programme range from national energy companies to social housing providers. Start-ups in the cohort are driving cutting edge innovation, ranging from drone thermal imaging as an EPC alternative to climate data aggregators and companies who believe the buildings of the future will be grown, not built. The programme is being delivered by CodeBase, in partnership with Barclays Eagle Labs, and is funded by the UK Government through the Digital Growth Grant. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 3 Corporate and Investment Bank How we serve our clients We continue to evolve our model to support our clients and capture the opportunities as they transition to a low-carbon economy. Following the appointment of the Global Head of Sustainable Finance in November 2022, in early 2023 we established the CIB Sustainable Finance Management Team (CIB SF MT) with responsibility for driving the sustainable finance strategy in the CIB. The CIB SF MT acts as a consolidation point for the discussion and decision-making of key matters relating to the strategic direction of the CIB sustainable finance business, reviews financial performance and ensures a robust approach to climate risk management and controls. At Barclays we use the concept of the Power of One Barclays, which brings our organisation closer together to create synergies and provide customers and clients with the full range of our products and services. We have applied this mindset to consider how we can best serve our clients' needs relating to Sustainable and Transition Financing through an integrated approach across Barclays' products and services. This has included the strengthening of our sustainable finance teams, working together to deliver for our clients and embedding sustainability across our sector and industry coverage teams. Strengthening our sustainable finance teams Through the continued investment in our team we are able to deliver a fuller suite of products, solutions and expertise to clients as they transition towards a low-carbon economy. During 2023 we invested significantly in our sustainable finance capabilities through key senior and specialist hires which have strengthened our existing teams and expanded our sustainable finance product offering. This included hiring new Heads of Sustainable Project Finance and Carbon & Environmental Products Trading, facilitating the expansion of our product reach into these areas in recognition of client demand and the commercial opportunity. We have also continued to strengthen our existing sustainable finance teams with the hiring of senior specialists including across ESG ratings advisory, AgriTech and battery technologies, and regionally focused sustainable finance specialists covering the Middle East, North Africa and Asia Pacific. Following growth in the team over the past few years, at the end of 2023 we had in excess of 90 sustainable finance-focused bankers in the CIB, supported by ongoing investment in expertise in our sustainable finance and ESG-focused functional teams. Working together to deliver for our clients We continue to facilitate collaboration across CIB teams in order to work more closely together on sustainable finance topics and solutions. In 2023 we created a Sustainable Finance Leadership Group bringing together key 'champions' of sustainable finance from across the CIB with a view to creating more frequent and deeper exchanges of ideas – which will help strengthen our dialogue with clients and drive better outcomes for them. We believe that the strength of our franchise is truly unlocked when we work closely together across our teams. Examples of this included collaborations between our ESG advisory, industry coverage and Sustainable Impact Banking teams on M&A opportunities, as well as our industry teams bringing technical experts into client meetings to discuss decarbonisation options. Barclays PLC Annual Report 2023 114 CIB Sustainable Finance ecosystem Over the past year we continued to evaluate how sectors and companies are best covered by the Bank, and have adapted our model accordingly to provide the support and resources required by our clients. In January 2024 we announced the creation of our new Energy Transition Group – bringing together our Power, Energy and Sustainable Impact Banking (SIB) teams so we can better serve as lead advisers to clients in the Energy and Power sectors exploring potential energy transition opportunities. We also announced the creation of our new Sustainable Banking Group within Capital Markets, combining our Sustainable Capital Markets and ESG Advisory team (previously part of the SIB team). Embedding sustainability in our business Over the course of 2023 we continued to embed sustainability across our sector and industry coverage teams through a number of important initiatives to upskill our bankers and develop their expertise to engage with clients on the transition. We ran our first sector-level client activation programmes – focused on the Building Materials Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) Barclays PLC Annual Report 2023 115 Energy Transition Group The newly formed Energy Transition Group provides clients with integrated strategic advice and financing solutions through the energy value chain as they transition to a lower-carbon future. The Energy Transition Group comprises specialist bankers drawn from the Bank's previous global Natural Resources and Power sector teams and Sustainable and Impact Investment Banking team. It aims to be a centre of excellence providing a broad spectrum of expertise regarding the energy transition – including hydrogen, energy transition finance, carbon capture, renewables and renewable natural gas.   Sustainable Banking Group The newly formed Sustainable Banking Group supports the sustainability needs of our clients across all industries through a tailored approach to coverage, advice and execution across M&A, risk management, equity and debt. The team will focus on covering the range of sponsors and investors with dedicated sustainability capital, advising clients on sustainability matters and offering a broad range of sustainable capital markets products – originating, structuring and executing sustainable-finance-labelled instruments including green, social, sustainable, transition and sustainability-linked solutions and vehicles. TCFD Strategy Recommendation (b) | Strategic Pillar 3 and Power and Utility sectors – accelerating the ability of our bankers to identify and capture sustainable finance opportunities by helping them focus on key decarbonisation levers in these sectors and how to deploy Barclays' products and services to help clients unlock them. We recognise the importance of continued training and upskilling of our workforce, particularly in the rapidly developing climate technologies of the future, and ran a series of seminars and workshops throughout the year covering these key topics. In the second half of 2023 we also developed a detailed sustainable finance training plan for colleagues across the CIB, which we will roll-out in 2024. During 2023 we continued to develop our management information as it relates to our sustainable finance business, including appropriate KPIs and sustainable finance metrics on our bankers' scorecards, which are tracked monthly – increasing the visibility of our performance. We will continue to evolve our approach in this area in 2024. As we see further growth in sustainable finance and the ESG market space the focus on controls remains imperative to enable our business to operate in a precise and scalable way. Dedicated ESG review and control fora are being stood up at the CIB and individual business level to provide oversight of greenwashing risks in the context of financing of clients in high emitting sectors. In addition, we have continued to strengthen our approach to climate risk governance within the CIB and review climate risk, financed emissions and transition finance metrics at appropriate fora and committees to provide financial and operational risk oversight. Federal Republic of Germany: Green Bonds Barclays acted as Joint Lead Manager on the Federal Republic of Germany’s €5.25bn 10Y Green Bond in April 2023, and €4.5bn 30Y Green Bond in June 2023. These transactions are intended to support the country’s transition towards a low-carbon, resource-efficient and sustainable economy. The funds raised from the bonds will be allocated towards eligible green expenditures including all areas of the federal budget that support the overall climate and sustainability targets set out in the Federal Republic of Germany’s Green Bond Framework. Furthermore, the eligible expenditures are mapped to the six environmental objectives of the EU taxonomy for environmentally sustainable economic activities. Barclays is pleased to support the German government in continuing its strategy of establishing a green yield curve for the euro area. Sustainable Project Finance Sustainable Product Group In 2023 we established our Global Sustainable Project Finance team. The team provides project financing solutions for clients aiming to decarbonise their business, accelerate the development of low-carbon technologies and monetise the associated revenue opportunities. The team builds on our existing experience and expertise in project finance to offer integrated and innovative solutions for clients including tax equity, global debt arrangement and structuring, alongside strategic M&A, rates and capital markets expertise. The Sustainable Product Group delivers a broad range of green and sustainability-linked corporate banking products. The Sustainable Product Group’s offering includes green and sustainability-linked trade, corporate lending, fund-financing products and deposit solutions. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) Barclays PLC Annual Report 2023 116 TCFD Strategy Recommendation (b) | Strategic Pillar 3 Ohmium International Global Markets ESG across our research teams Sustainable and Thematic Investing Our Global Markets team provides ESG integration across a wide range of investment solutions spanning Quantitative Investment Strategies, Equity or Credit Structured Solutions and Funds. This includes our Green & Social Notes programme issuance of green notes against eligible assets, earmarked in line with our Green & Social Notes Framework. Global Markets also provides financing solutions such as clean tech securitisation and can embed sustainability- linked features into hedging solutions. Our Global Markets team also provides market access to ESG products and a range of Prime Services – including clearing carbon and ESG futures. During 2023, Barclays continued to grow its financing business backed by assets that match its Sustainable Finance Framework and support the long-term green, transition and broader sustainable financing requirements of our clients, with a focus on securitised products in residential and solar, heat pumps and electric vehicles. Looking forward into 2024 we expect to expand into other sustainable and energy-efficient technologies and opportunities. Barclays also grew its footprint in originating and distributing social and sustainability-linked loans, as well as structured financing with sustainable use of proceeds instruments Green & Social Notes programme The Barclays Bank PLC Green & Social Notes Programme covers Barclays-issued products in the Equities and Rates space, leveraging use-of- proceeds assets including renewable energy, low-carbon transport and energy-efficient real estate, in line with the requirements set out in our Green & Social Notes Framework. All green assets in the pool are verified by a third party and aligned to industry standards. + Further details on our green notes programme can be found at: home.barclays/greenbonds/ In April 2023, Ohmium International, a leading green hydrogen company that designs, manufactures and deploys advanced proton exchange membrane electrolyzer systems using renewable energy to produce pressurised high-purity green hydrogen, partnered with teams across Barclays’ Corporate and Investment Bank to help successfully close a $250m Series C growth equity financing round. Barclays served as Placement Agent to Ohmium on the capital raise. The funding will be used to support Ohmium’s expansion to 2GW in annual manufacturing capacity and the deployment of projects for the company’s growing global customer pipeline in key regions. The investment will also provide significant capital to scale Ohmium’s business, including accelerating its pioneering research and development programmes to reduce the cost of green hydrogen production. At that time, this transaction was the fifth hydrogen deal in 13 months for Barclays’ Sustainable and Impact Banking Group, now known as the Energy Transition Group, highlighting our deep sector knowledge across the entire hydrogen technology value chain and ecosystem. Our approach to ESG research is differentiated through broad-based engagement with ESG issues and higher-quality insights with our investor clients. The ESG Research team collaborates with Equity and FICC research teams to identify and analyse material ESG opportunities and risks, and to integrate ESG into their analysis and recommendations. The team also analyses how investors measure and consider ESG factors in the investment process, helping asset managers structure their portfolios and investment decisions. Over 475 ESG-focused research reports were published in 2023. Our expectation is that topics such as climate change, decarbonisation and biodiversity – as well as other sustainability themes and specific ESG attributes – will continue to grow in importance, and that the global momentum behind ESG investing will continue at pace, making it an essential requisite for a large and growing number of investors. During 2023 ESG Research hosted and contributed content to client events around the world – including Barclays' first Sustainable Finance Conference in New York, its fourth annual ESG Research conference in London, its first Sustainable Finance Conference in Singapore, its Sustainable Policy Forum in Brussels and its ESG Emerging Market Corporate Day. + Further details on ESG Research can be found at: cib.barclays/research The Sustainable and Thematic Investing Research team at Barclays focuses on sustainability and long-term thematic disruption. Its reports are produced in conjunction with sector analysts, with the aim of identifying multi- year sector trends that could help shape the future business environment. Typically the team identify topics with a five- to 10-year horizon, with investment opportunities spanning both public and private companies. To aid thematic and ESG investors, the team maintains an investment framework known as the ‘2030 Thematic Roadmap: 150 Trends’ – and has published reports on various trends relating to disruptive technology, sustainability and demographic change. The team has also developed a range of investment tools including trend momentum scores, UN SDG mapping and company revenue tagging. Relevant 2023 publications include Advance Chemical Recycling, Grid Infrastructure, Digital Safety, Vehicle Grid Integration, Cultured Meat, Gender & Social Inclusion, Human Capital and VC Trends. + Further details on the Sustainable and Thematic Investing Research team can be found at: cib.barclays/ our-insights Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) Barclays PLC Annual Report 2023 117 TCFD Strategy Recommendation (b) | Strategic Pillar 3 Sustainable Impact Capital programme by Barclays Principal Investments Barclays' Treasury plays a key role in helping Barclays meet its climate goals by allocating, managing and governing its financial resources effectively and executing sustainable principal investments and transactions, supporting businesses to advance strategic climate objectives in the transition towards a low- carbon economy. Sustainable Impact Capital Our Sustainable Impact Capital portfolio, managed by the Barclays Principal Investments team in Treasury, has a mandate to invest up to £500m into global climate technology companies by the end of 2027 – helping support our clients’ transition towards a low-carbon economy. + Further examples of our green innovation financing can be found at: home.barclays/sustainability/our-position-on- climate-change/accelerating-the-transition/sustainable- impact-capital/ We aim to drive change by strategically investing in visionary early-stage climate tech companies paving the way for solutions in clean energy and a reduction in GHG emissions. The Sustainable Impact Capital portfolio targets investments that could potentially catalyse transformative breakthroughs in technology, infrastructure and scalable practices. Our aim is to bridge financing gaps and support the acceleration and scalability of solutions to environmental challenges. We have made meaningful progress towards building a portfolio of strategic investments. £138m of our £500m investment mandate has been deployed since 2020, with £49m invested in 2023 – up 42% from 2022. We continue to focus on decarbonisation technologies supporting transition within carbon-intensive sectors, particularly where Barclays has meaningful client exposure – such as Power, Industry, Transport, Agriculture and Real Estate – including solutions delivering carbon capture, carbon dioxide removal and green hydrogen. + Further examples of our entrepreneur and innovation programmes can be found on page 109. Achieved to date £138m Our portfolio of investments since 2020 £m n 2020 n 2021 n 2022 n 2023 n Mandate by end of 2027 GeoPura The investment in GeoPura, a producer of Hydrogen Power Units (HPUs), demonstrates our support for innovative technologies that enhance the energy transition. Established to make an impact in decarbonising global industries using zero-emission fuels, GeoPura has grown rapidly since delivering its first HPU. Its technology and end-to-end service is a multi-purpose replacement for diesel power worldwide. GeoPura generates hydrogen and transports the fuel to customers for use in its HPUs. The company is targeting sectors with the highest diesel use today – including construction, infrastructure, outdoor events, and back-up power for hospitals, data centres and critical infrastructure. It is also providing a solution for commercial EV charging where the local electricity network is not capable. Headquartered in Nottingham, with manufacturing capability in Newcastle upon Tyne, the investment is enabling mass manufacturing of HPUs – increasing the production of green hydrogen to fuel the units and driving green skills in the North East, while supporting the technology's global deployment. + Further details can be found at: home.barclays/news/press-releases/2023/02/ Giants-of-industry-manufacturing-finance-back-UK-green-hydrogen-pioneer- GeoPura-with-36m-investment/ 24303549500Barclays PLC Annual Report 2023 118 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 3 Advanced Electric Machines Barclays’ Sustainable Impact Capital investment in Advanced Electric Machines (AEM) – a UK- based sustainable motors and powertrain systems developer and manufacturer – signifies its support for innovative automotive technology. With the global transition to EVs there is growing demand for key raw materials – especially rare-earth minerals for use in magnets essential for EV motor production. However, the limited global production capacity of these materials poses a significant challenge. AEM’s next-generation electric motors and powertrain systems are designed without rare- earth magnets and copper windings, while focused on performance, range and efficiency. This breakthrough not only ensures a sustainable supply chain but also enhances recyclability – contributing to a circular economy. In an era where sustainable mobility solutions are crucial, Barclays’ investment in AEM represents a significant step towards unlocking electric mobility’s potential while addressing critical raw material challenges. + Further details can be found at: home.barclays/ news/2023/10/sic-advanced-electric-machines/ Sustainable Ventures Barclays' Sustainable Impact Capital led Sustainable Ventures' first-ever fundraising round, with participation from angel investors. Sustainable Ventures is an active climate tech ecosystem in the UK. Its model combines funding, workspaces and expert support services – providing access to a pipeline of leading climate tech investment opportunities. Sustainable Ventures’ winning concept has supported over 500 climate tech companies to rapidly scale their technologies, drive increased returns, and directly create more than 5,500 jobs. Barclays understands that scaling climate technology companies require much more than venture capital. The investment in Sustainable Ventures affirms our commitment through providing access to the bespoke support programmes, professional services, and community these companies need and deserve – all designed to accelerate sustainable growth. Our investment will enable Sustainable Ventures’ regional expansion, starting with Manchester in 2024 – assisting the region in meeting its accelerated 2038 net zero target while delivering inclusive green jobs and boosting the economy. Further details can be found at: barclays/news/2023/10/barclays-invests-in-sustainable- ventures-to-help-drive-uk-expans/ + Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 3 Treasury green programmes Green bond investment portfolio impact by sector (%) Private Bank and Wealth Management Green bond investment portfolio Treasury invests in green bonds as part of the liquidity pool. As an investor we undertake work to ascertain the ESG credentials of proposed investments. We engage with green, social and sustainability bond issuers to understand how their frameworks and goals align with our investment approach. The proceeds of our green bond investments fund projects in areas such as renewable energy and clean transport. We continue to consider investments in new supranational organisations and government- issued bonds as they become available, with the aim to invest £4bn over time. Green bond investment portfolio size by year £bn 2023 2022 2021 Responsible investing Private Bank In our Private Bank, responsible investing means integrating material ESG considerations – among others – into our investment decisions, and fulfilling our stewardship responsibilities through engagement and voting. This is an integral element in meeting our fiduciary duties towards our clients. Our Discretionary Portfolio Management (DPM) services are offered across the Private Bank and sit at the core of its long- term strategy. Our DPM Traditional strategies include the Global Multi-Asset Class Strategy, Equity strategies and Fixed Income strategies. Our DPM Sustainable strategies are the Multi- Asset Class Sustainable Total Return Strategy and the Sustainable Global Equity Strategy. While we incorporate the same approach in each of our discretionary strategies and in all 1 jurisdictions in which we operate, we may have portfolios with specific requirements where we need to vary our approach to our core strategies. For our Traditional strategies we maintain a standard set of exclusions that do not allow us to invest in businesses we view as being involved in the manufacture of controversial weapons, and we consider material ESG risks as part of the standard investment process. n Renewable Energy and Energy Efficiency n Transport n Other 30 45 17 n Water and Waste n Agriculture, Land Use 4 5 Green bond investment portfolio impact by region (%) n Europe n Asia n South America 73 7 7 n Africa n North America 11 3 Barclays PLC Annual Report 2023 119 Our Sustainable strategies seek to invest in businesses that provide products and services to support the transition to a more sustainable economy. These identify businesses we believe are able to mitigate ESG risks from an investment perspective, demonstrate high standards of non-financial ESG quality, and address sustainability considerations through their economic activities by aligning to at least one of the UN SDGs. Our Sustainable strategies also exclude certain companies that generate revenues over our internally defined thresholds from adult entertainment, alcohol, armaments, gambling, fossil fuels, tobacco and controversial weapons. All our DPM strategies seek to deliver competitive investment returns for our clients and create long-term value for stakeholders. We believe responsible investing helps us achieve this. + Further details on the Private Bank's approach to responsible investing can be found at: privatebank.barclays.com/what-we- offer/investments/responsible-investing-engagement-and- voting-activities Barclays Investment Solutions Limited (BISL) Just as in the Private Bank, responsible investing for BISL means integrating material ESG considerations – among others – into our investment decisions, and fulfilling our stewardship responsibilities through engagement and voting. This is an integral element in meeting our fiduciary duties towards our clients. Our main ESG offering is the Multi- Asset Sustainable Fund. We also have a range of single-asset-class funds classified as Article 8 under the EU’s Sustainable Finance Disclosure Regulation, which exclude certain companies that generate revenues over our internally defined thresholds from adult entertainment, alcohol, armaments, gambling, fossil fuels, tobacco and controversial weapons. 2.22.83.4304545177377113Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) | Strategic Pillar 3 BISL factors responsible investing into its discretionary portfolio and fund investment solutions. The vast majority of our clients’ assets are managed by external fund managers. We aim to assess each of those managers based on their ESG credentials among other relevant factors. Every manager’s offering is given a single standalone score from A to C for ESG considerations – reflecting both their intent and their outcome. We focus on how ESG is embedded across each of five key areas: the parent company; the people managing the assets; the investment philosophy employed; the robustness of the process; and the performance achieved. Ultimately, we award an ESG score for every fund we recommend or invest in. The team uses data from different sources, including investment managers and MSCI ESG Manager, and as such there may be some limitations in the data we use. + Further details on BISL's approach to responsible investing can be found at: barclays.co.uk/wealth-management/ important-information/responsible-investing-statement Industry initiatives Private Bank Barclays Private Bank Investment Management became a signatory of the Principles for Responsible Investment (PRI) in 2022, completing its first reporting to the PRI on responsible investing activities in 2023. Being a signatory to the PRI allows us to publicly demonstrate our commitment to responsible investment. The PRI defines responsible investment as a strategy and practice to incorporate ESG factors in investment decisions and active ownership. Its goal is to help contribute to the creation of a sustainable financial system, with signatories committing to incorporate ESG issues via the six Principles in their investment practice. Barclays Investment Solutions Limited BISL became a signatory to the PRI in 2023. Prior to this, and since 2016, BISL’s subsidiary Barclays Asset Management Limited was a signatory. BISL also became a signatory to the UK Stewardship Code in 2023, which sets high stewardship standards for those investing money on behalf of UK savers and pensioners and those that support them. Stewardship is the responsible allocation, management and oversight of capital to create long-term value for clients and beneficiaries with the aim of achieving sustainable benefits for the economy, the environment and society. Engagement and voting Private Bank and Barclays Investment Solutions Limited (BISL) Both the Private Bank and BISL undertake engagement and voting in partnership with our stewardship services provider, EOS at Federated Hermes (EOS), in respect of certain holdings 2 . We view relating to specific services engagement and voting as an important mechanism through which to hold management to account and act as a lever to promote change in investee companies on material ESG issues where appropriate. We believe companies that can better manage material ESG issues could be less prone to severe incidents such as fraud, litigation or reputational risks. Voting forms an integral part of the Private Bank and BISL's overall stewardship strategy and is used as a tactical tool to achieve desired changes on ESG issues. Based on various metrics, BISL filters EOS's voting recommendations in relation to company holdings and, if deemed necessary, our portfolio managers may deviate from EOS's recommendation. At Private Bank, for our direct equity holdings, we use our rights as shareholders to seek and drive our desired changes. Following receipt of EOS’s voting recommendations, our Equity portfolio managers meet to discuss this information for a select number of voting issues in advance of making the voting decision on behalf of our clients. Our Equity portfolio managers are ultimately responsible for making voting decisions. All voting activities sit alongside engagement practices, reflecting both the Private Bank and BISL approach of promoting constructive dialogue with investee companies by building long-term relationships to seek to influence ESG and other practices. This is mostly undertaken by EOS, which engages on behalf of clients including Barclays with a wide range of stakeholders – including government authorities, trade bodies, unions, investors and NGOs – to seek to identify and respond to market-wide and systemic risks. Both the Private Bank and BISL make their engagement and voting activities publicly available to all stakeholders on the Barclays website. We believe such transparency is an integral part of good governance. + Further details on engagement and voting can be found at: Private Bank: privatebank.barclays.com/what-we-offer/ investments/responsible-investing-engagement-and-voting- activities BISL: barclays.co.uk/wealth-management/important- information/responsible-investing-statement Barclays PLC Annual Report 2023 120 Responsible Lending Private Bank We have launched our Greener Mortgage 3 for UK properties, offering a reduced Discount arrangement fee for new-build properties with an EPC rating of A-B – incentivising clients to seek energy-efficient properties and to encourage homebuilders to achieve maximum energy efficiency from their projects. Clients will also be supported in improving the energy efficiency of their existing properties – we have publications available to encourage clients to consider sustainably retrofitting their homes to improve energy efficiency, and intend to enhance this throughout 2024. This falls into the wider work we have undertaken on creating educational 4 content and guidance for clients in relation to ESG in the Real Estate space and beyond. For our wider credit offering in this space we are exploring opportunities to enhance our proposition to support clients in making more sustainable choices across the spectrum of lending products throughout 2024 and 2025. Notes: 1 The exception is India, where we offer strategies developed for the local market. ESG integration and engagement and voting are not undertaken. 2 Engagement on select material ESG issues and voting activities are being exercised in relation to: For Private Bank: Private Bank DPM investment strategies globally with the exception of services provided in India. Engagement activity is undertaken for our direct fixed income and equity holdings in companies, while voting activity is only undertaken for our equity holdings. Engagement and voting activities are undertaken for portfolios managed in the UK, Jersey, Ireland, Switzerland and Monaco. It is our intention to exercise voting in all markets, although at times our ability to do so may be hindered by regulatory and practical considerations as well as internal restrictions. For BISL: Direct holdings within BISL DPM investment strategies and on holdings within segregated mandates that form part of BISL funds. 3 This is how we are now describing the Green Private Bank Mortgages referenced in the 2022 Barclays PLC Annual Report. 4 We are continuing to explore the creation of an online hub for this content. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) Embedding climate and sustainability into our business We are embedding climate and sustainability throughout Barclays, taking into account the impact of climate-related risks and opportunities on our businesses, strategy and financial planning. Our Climate Strategy is underpinned by the way we assess and manage our exposure to climate- related risk, as well as by our Purpose to work together for a better financial future for our customers, clients and communities. The risks associated with climate change are subject to rapidly increasing societal, regulatory and policy focus both in the UK and internationally. In 2022, Climate risk became a Principal Risk within our Enterprise Risk Management Framework, aiming to ensure a holistic approach to risk identification, assessment and management. Barclays' Climate Risk Framework facilitates the structured integration of climate risk considerations into the Bank's operations. It undergoes regular reviews and updates – including changes to risk taxonomy, definitions and methodology – which align to align the Framework with changing regulatory expectations and external developments. + Further details on climate risk identification, assessment and management can be navigated via the Risk Review contents section on page 254. We continue to build on our inclusion of Climate Strategy and climate-related risks and opportunities in our financial planning, working to further embed these considerations into our products and services and operations. We have continued to work on embedding climate and sustainability considerations into the culture of the organisation through training and knowledge building. We have developed several climate- and sustainability-related mandatory and non-mandatory training initiatives across the organisation and provided training to a number of functions across the Group. Impact of climate-related risks and opportunities on our business, strategy and financial planning Barclays’ 2023 financial planning process included a review of our strategy, its implementation, and tracking of our progress against climate-related targets – as well as capturing a view of climate-related risks and opportunities. During 2023 we enhanced our monthly reporting framework to cover a view of the balance sheet and revenue from Sustainable Financing. This supports our ability to review our sustainable financing portfolio at greater granularity and improve relevant business engagement through the financial planning process. Enhancements were made to help us further evaluate the portfolio's performance and identify opportunities to maximise revenue generation activities. These outputs have been incorporated in our financial planning process for 2023. Our planning process also considered current climate policies to ensure they are included in the base scenario. We also considered impairment over the horizon of the financial plan. At this point in time, there are no material amendments required to the financial plan. All key businesses and functions are involved in integrating climate-related risks and opportunities into our financial planning process. Implementing our Climate Strategy is managed through central Sustainable Finance teams under the Heads of Sustainable Finance for both CIB and Barclays UK. We are developing processes and levers that we anticipate will allow us to further engage and impact the businesses we work with. For example: • The three pillars of our Climate Strategy, as well as our Sustainable and Transition Financing target of $1trn, are key drivers of our finance planning process with a pathway to achieve this as well as risks and opportunities reviewed with business heads • We continue to develop our green, sustainable and transition finance banking product sets, including for retail customers, (for example green mortgages), bonds/loans (including Project Finance for renewables) and securitised products • We strive to continue to decarbonise our own operations, reducing our Scope 1 and 2 emissions and our Scope 3 operational emissions Barclays PLC Annual Report 2023 121 • We are tracking progress towards portfolio alignment of our financed emissions with the goals and timelines of the Paris Agreement through BlueTrack™, which includes a number of portfolio alignment metrics and levers available to manage the portfolio against these targets while understanding their financial implications. The metrics are subject to second-line review by the Climate Risk team to assess the strategy against the targets. We have developed an internal approach to track and monitor progress against our targets and how we govern these internally • We conduct portfolio reviews to monitor whether business activities are conducted within Barclays’ mandate and aligned with our expectations, and whether they are of an appropriate scale relative to the risk and reward of the underlying activities. Mandate & Scale Exposure Controls form part of our overall Risk Appetite Control Framework and climate risks have been integrated into annual credit portfolio reviews for elevated risk sectors since 2020. Furthermore, we have introduced mandate and scale limits linked to scoring within our Client Transition Framework. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) Barclays PLC Annual Report 2023 122 A range of scenario analyses was undertaken this year with the aim to further uncover areas of risk and opportunity, as well as integrate climate scenario analysis into our strategic and financial planning. This included two climate stress-tests with the results allowing Barclays to understand resilience to Climate risk in those scenarios. The strategic review of sustainable financing was also refreshed during the year across Barclays UK and the CIB. The review built upon both new and previously identified commercial opportunities. The output was considered in the financial planning process, including incremental revenue, cost and capital. Key opportunities continue to reside within Equity Capital Markets, Debt Capital Markets and lending, and some smaller new markets. The planning process included an assessment of our financed emissions reduction targets for some of our highest-emitting sectors: Energy, Power, Cement, Automotive and Steel. Barclays has set absolute emissions or emissions intensity targets for these sectors and the impacts of meeting them are integrated into the financial planning process. Barclays continues to engage with our clients to support their transition to a low-carbon economy. Our current emissions targets are not forecasted to materially impact financial performance over the next five years. The financial planning process also covered a review of our net zero operations strategy. Building on the hiring of our Heads of Sustainable Finance in CIB and Barclays UK, over the past year we have continued to grow our existing talent with several strategic hires – with a focus on expanding our product capabilities as we continue to drive performance against our selected targets. Each hire will allow us to further accelerate our Climate Strategy and increase co- ordination, with a focus on how we can help our customers and clients with their individual transitions to a low-carbon economy. We will continue to further enhance how our Climate Strategy is embedded into the way we think about financial planning over the coming years – reflecting on the progress we made during 2023. Skills, culture and training Building our expertise We are aware that responding effectively to climate and sustainability issues is one of the greatest challenges facing businesses, investors, and society today. In 2023 we continued to educate colleagues on sustainability and climate change risk and opportunities, their impact on society and the Bank, and Barclays' strategy and response. As we strengthen our sustainability capability and culture, our colleagues continue to build insights and expertise to help execute our Climate Strategy. We have made online learning available to grow everyone’s knowledge, and created upskilling for specific areas in line with strategic priorities – including mandatory training and targeted development for certain teams relevant to their roles and responsibilities. This is alongside investment in our future pipeline of colleague skills through a newly created apprenticeship programme. A communications campaign informed colleagues of how Barclays is responding to climate change and sustainability more broadly, reinforcing how they can take action – including building their knowledge and skills in this area. Our suite of Sustainability training resources is supporting wider awareness across the organisation, comprising of videos and e- learning. We intend to evolve this during 2024. The topics covered include addressing climate change, principles of sustainability, how we support our communities, and modern slavery. During 2023 a mandatory online climate risk training module was provided to 12,306 colleagues across Risk, Compliance, Internal Audit, Markets Post Trade and Business Banking. This training focused on the elevation of climate to a Principal Risk. TCFD Strategy Recommendation (b) The 2023 financial planning process used a five- year climate baseline scenario to consider the impacts of climate risks. The baseline scenario considered the impact of current and agreed climate policies across the UK, US and EU on macroeconomic variables such as GDP and Unemployment. This was done via a detailed assessment of climate policy impacts, likelihood of implementation and current level of policy progress. The outcome of this assessment led to a comparison between the climate baseline scenario and the scenarios used for financial planning, indicating a current de minimis impact on the macroeconomic variables used to project financial performance. We will continue to review how climate risks manifest in the economy through a baseline scenario – and, where these impacts increase, will consider those within our financial planning process. Workstreams specifically related to finance have been further embedded within our overall global financial planning processes, including dedicated climate management reporting information. Further details of how this work has served as an input in our five-year financial planning process are set out below – including our approach to sustainable financing, targets and capital investments. During the 2023 financial planning process we assessed the financial impact of embedding individual parts of our Climate Strategy, new initiatives and targets across our businesses. This includes the wholesale credit book, sustainable financing and sustainable lending in the CIB, and initiatives across our retail businesses such as green mortgages and sustainable investing. Build-out of new product capabilities including Global Project Finance are also captured. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) In addition, a separate mandatory training module on Sustainability, ESG and Climate Risk was delivered to 15,319 colleagues in 2023 across the Corporate and Investment Bank, Trade and Working Capital, Wholesale Onboarding and Group FCO, Finance, Compliance and Public Policy and Corporate Responsibility – further developing colleagues' knowledge of the core elements of ESG. This module focused on how Barclays manages climate risk, as well as covering the Group sustainability-related statements and internal standards and how they should be applied. + Further details on Barclays' sustainability statements and policy positions can be found from page 40. In Q3 2023, Sustainability September – a communications campaign across the organisation – helped engage colleagues on key sustainability-related topics. This included short videos, a series of live recorded conversations with senior leaders, and associated reading materials. To ensure our workforce of the future is well positioned to understand climate risk, in November 2023 we introduced a new Sustainability Apprenticeship – targeting internal colleagues and working in partnership with an external provider. The apprenticeship is one of six selected by industry experts to mark His Majesty The King’s Coronation, gaining recognition for educating people to understand and develop ways to facilitate the transition to a low-carbon economy. This will encourage the building of a long-term pipeline of knowledge throughout Barclays. We also collaborated with external suppliers to deliver accredited development programmes for teams seeking to build specialist sustainability knowledge. For example, a development programme began in 2023 for 300 Corporate Bank colleagues in our Sustainability Academy pilot to develop their climate and sustainability knowledge. We intend to support more Corporate Banking colleagues through the programme during 2024. In addition, we delivered training to colleagues in the Business Bank on strategies for supporting SME customers on their transition to net zero. In Barclays UK we launched our Sustainability Champions community to bring together our most engaged colleagues. In the Consumer Bank specifically, we provided training on home energy efficiency and climate risk for mortgage advisors, and hosted a webinar for mortgage brokers on retrofitting. We are continuing to build a targeted learning proposition for our Corporate and Investment Bank to support their ongoing development on the client transition strategy. Training on greenwashing was delivered to targeted colleagues in Barclays UK, Private Bank and Wealth Management, Corporate Bank, Legal, Compliance, Marketing and Corporate Communications in EMEA, the US and APAC. This covered topics including forthcoming regulation and how to identify and mitigate greenwashing risk. Barclays PLC Annual Report 2023 123 Incentives For the Executive Directors of Barclays PLC, an element of each of their annual bonus awards and Long-Term Incentive Plan awards is driven by non-financial performance measures – including measures relating to climate and sustainability. Barclays’ performance against non-financial measures, including ESG metrics, is also explicitly considered in the determination of the incentive pool – directly impacting pay levels of the wider workforce. Non-financial performance for the Executive Directors’ 2023 annual bonus and the 2023 incentives pool was assessed against three categories: Customers and clients; Colleagues; and Climate and Sustainability. The latter included climate-related measures such as performance against our Sustainable and Transition Financing target, financed emissions reduction targets, carbon footprint reduction, and increase in renewable energy usage – as well as measures relating to our investment in communities. + Further details can be found in our Remuneration report from page 191. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) Just transition and nature and biodiversity We have continued to develop our work on just transition and nature and biodiversity, which are intrinsically connected to efforts to mitigate and adapt to climate change. Just transition During 2023 we continued to see progress on just transition, with efforts from policymakers, industry initiatives, civil society and the private sector. Following the COP27 Implementation Plan, the first Annual High-level ministerial roundtable on just transition took place during COP28 to discuss the work programme on just transition pathways. In the UK, the Transition Plan Taskforce (TPT) integrated the recommendations of the Just Transition Working Group in the Disclosure Framework, encouraging companies to disclose whether – and how – they have identified, assessed and taken into account the impacts and dependencies of the transition plans on stakeholders, society, the economy and the natural environment throughout their value chain. In turn, the Taskforce for Nature-related Financial Disclosures (TNFD) Disclosure Framework included recommendations to disclose details of human rights policies and engagement activities with respect to the assessment and response to nature-related dependencies, impacts, risks and opportunities. In this context Barclays continues to acknowledge the role financial institutions play in supporting a just transition. We have also continued our efforts to build an approach to just transition that considers the social risks and opportunities of the transition and seeks to engage relevant stakeholders. As we pilot our approach to just transition in our Client Transition Framework, the findings of our pilot show that 40% of the assessed clients have committed to a just transition. We will consider these findings in our engagement with clients. We also intend to include social considerations as we develop our transition plan. Barclays UK has continued to identify opportunities to address the social challenges of the transition in the context of the energy crisis. For example, in 2023 we launched a pilot with our strategic partner British Gas, aiming to support thousands of customers experiencing low financial wellbeing in accessing support with their energy bills and relevant grants to make energy- efficiency-related improvements to their homes. We have continued to contribute to the development of a just transition approach for the financial sector through our engagement with initiatives and the organisation of thought leadership events and discussions, as described below: • During New York Climate Week Barclays hosted an event with UNEP FI, Ceres and Boston Consulting Group (BCG), bringing together leaders in the sustainability and finance space to discuss the role finance can play in ensuring an equitable climate transition. Barclays PLC Annual Report 2023 124 • During COP28 Barclays co-hosted and organised three events alongside its partners: – an event with LSE discussing the barriers to investing in emerging markets and mobilising debt markets; – an event with Ceres on the regional approach to financing a just transition; and – an event with BCG and Ceres discussing whether financial institutions can facilitate a just transition through cleantech financing and green jobs. • As part of our participation in the LSE Financing a Just Transition Alliance (FJTA), we contributed to the report 'Sowing seeds: How finance can support a just transition in UK agriculture', which was designed to increase understanding across the financial sector of how it can support a just transition in agriculture by mobilising more finance towards companies committed to and making progress to support a just nature transition. • Barclays is a Founding Funder of LSE's Just Transition Finance Lab, which launches in February 2024. The Lab plans to work on the development of financial tools and instruments for the just transition, metrics to measure just transition performance; identify appropriate policy reforms to help to mobilise finance for the just transition, and develop case studies that demonstrate how just transition finance can be applied in practice. Cognisant of the importance of local approaches for just transition and the integration of the voices of impacted stakeholders, we also organised a stakeholder engagement, with the support of Ceres, that allowed us to access the perspectives of investors, non-profits, and community leaders to help our understanding of just transition in the US. Our approach to nature and biodiversity Banks have an important role to play in contributing to nature-positive finance and managing their nature-related risks. Nature is a key sustainability focus for Barclays and the wider industry going forward, given that nature and its ecosystem services fundamentally underpin economies and societies. Nature is also important to the banking sector due to the interlinkages with climate change and social impacts, with disclosure requirements moving towards a holistic approach to nature, climate and social risks and opportunities. During 2023 nature loss continued to be recognised within new and emerging guidance and regulation. Significantly for companies and financial institutions, the TNFD finalised its framework for organisations to assess and disclose nature-related risks and opportunities. Upcoming disclosure requirements on nature-related topics were confirmed under the EU Corporate Sustainability Reporting Directive, as well as within guidance published by the TPT regarding incorporating nature-related impacts and dependencies associated with climate transition plans. We continue to work to build an understanding of the ways our activities and those of our clients impact and depend on nature. This includes engaging with industry and cross-sector groups as detailed in the 'Engagement' section on the following page. We continue to explore how to integrate these considerations into policy and process and reviewing the ways our financing activities can contribute to nature. Given the interdependencies across the climate, nature and social agendas, reviewing ways we can address these areas holistically is important. For instance, drawing on the work of the TPT, we are considering nature-related topics in our sector approach for Agriculture. See page 93 for details. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) During 2023 we worked on setting the foundation to our approach on nature through planning and preparation to understand nature- related regulatory obligations and disclosure frameworks, and build consensus for strategic action in 2024. We recognise the need for continuous improvement with regard to available data and technologies, in particular noting the complexity and challenge given the number of nature attributes and their associated metrics. During 2023 we engaged with a number of data providers to better understand data availability and capability. The following sets out a summary of this work. + Further information on our approach to nature can be found throughout the report. Nature-related risk - see pages 69, 100, and 276 Nature-related opportunity - see page 105 Nature-related governance - see page 232 Nature in our operations - see page 79 TNFD pilot - see page 276 Nature-related risk in financing We include financing restrictions that seek to address nature-related risk within our position statements on Forestry and Agricultural Commodities, World Heritage Sites and Ramsar Wetlands, and Climate Change. We continue to review and monitor how we can strengthen our approach. In 2023 we undertook a significant update of our Forestry and Agricultural Commodities Statement to expand the scope to include, for the first time, requirements for clients involved in South American beef production or primary processing and enhanced the existing requirements for clients involved in palm oil and soy. See page 100. We have continued to develop our approach to evaluating nature-related risk in financing. This included building on work across 2022-23 in which we piloted the TNFD Framework on our lending portfolio for Agriculture and Food in Europe, with a focus on UK Farming – in which Barclays has a significant presence. The results informed development of new questions for the Client Transition Tool (CTT) for UK farmers, which are due to be incorporated in 2024. See page 93 for details of our approach to the UK Agriculture sector. In recognition of nature- related impacts identified in the agricultural value chain, we also strengthened our approach to financing agricultural commodity sectors exposed to significant deforestation risk. We refined the work undertaken in 2022 to develop a sectoral heatmap, refreshing the industries included to align with the TNFD’s priority sector list. Our proposed next steps include consideration of the TNFD LEAP framework to conduct further sector-level analysis. See page 69 for more details. + Further details can be found in our position statements on the Barclays ESG Resource Hub at: home.barclays/ sustainability/esg-resource-hub/ Further details on our position statements can be found in the non-financial information statement from page 40. Nature-related financing Nature-related financing presents significant future opportunities for the financial sector, given the capital requirements to address and reverse nature loss. The biodiversity financing gap is estimated to be $700bn per year¹. We will continue to work towards meeting our green and sustainable finance targets, which include financing relevant to nature. Our Sustainable Finance Framework includes categories such as Sustainable Food, Agriculture, Forestry, Aquaculture and Fisheries, which we have mapped to nature-related UN SDGs – including SDG14, Life Under Water, and SDG 15, Life on Land. In Barclays UK we believe the nature transition is a key area where we can make an impact due to our prominent role in financing UK agriculture and agricultural land purchases. In 2023 examples of nature-related financing have included lending funds in relation to the Biodiversity Net Gain scheme and support for farmers who seek to apply more sustainable farming practices. We are supporting environmentally-focused climate technology start-ups through our SIC portfolio led by Barclays’ Principal Investments team. We are also exploring nature-related products and solutions for our clients in the CIB. See page 105 for details. + For more details of our green and sustainable financing and financing nature see the ‘Financing the transition section from page 105. Note: 1 cbd.int/doc/decisions/cop-15/cop-15-dec-04-en.pdf Engagement We see appropriate collaboration and engagement across industry as essential for sharing learnings across the sector and a successful nature-related transition. In 2023 we continued to provide feedback to the TNFD – both bilaterally, as part of our membership of the TNFD Forum, and through industry groups ahead of the finalisation of the TNFD Framework. Barclays PLC Annual Report 2023 125 Barclays provided input into the nature components of the TPT's disclosure guidance for climate transition plans as part of the TPT’s Nature Working Group. See page 61 for details of our wider engagement with TPT. We continued engagement with a number of industry and cross-sector groups, including the UN Principles for Responsible Banking (PRB) Nature Working Group – with which we fed into a guide to setting targets relating to banks' practices and processes on nature. We further provided input into the LSE's FJTA's publication on a just nature transition – see page 124 for details. As part of the Sustainable Markets Initiative’s Financial Services Task Force, Barclays co-led the publication of a guide on Financing Coastal Nature-based (NbS) Solutions - see page 105 for details. Barclays completed the third and final year of our partnership with the Blue Marine Foundation, which had the aim of supporting them in seeking to deliver their goal of ensuring that at least 30% of the global ocean is effectively protected and the other 70% sustainably managed by 2030. Our donation contributed to conservation outcomes including support for more than 445,000km of newly designated Marine 2 Protected Areas (MPAs), 900km of newly proposed MPAs, and advocacy and educational outreach to support the ongoing protection and restoration of the ocean – including through the award-winning 'The Sea We Breathe' educational site. + Further details on Blue Marine Foundation can be found at: bluemarinefoundation.com bluemarinefoundation.com/the-sea-we-breathe/ + For more details, see: unepfi.org/industries/banking/nature-target-setting- guidance/ lse.ac.uk/granthaminstitute/publication/sowing-seeds-how- finance-can-support-a-just-transition-in-uk-agriculture/ Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) Barclays PLC Annual Report 2023 126 TCFD Strategy Recommendation (b) Engaging with industry We know that leveraging the relationships we hold with stakeholders can support all of us in achieving our objectives. Continued engagement in the financial sector and other areas of the real economy and public sector will be important in delivering the actions necessary to meet our global sustainability goals. At a minimum, strategic partnerships with key stakeholders enables knowledge sharing and supports informed decision making. Collaborating with NGOs, academia, government agencies, private sector peers and local communities enhances our ability to understand, assess and address the intricate issues associated with climate change. These partnerships have the potential to uncover opportunities to deploy capital into areas that suffer from existing financing gaps and scale companies to disrupt markets and innovate for impact. During 2023, Barclays contributed to several workstreams across climate, nature, just transition, and advancing data and reporting standards. Our involvements in these workstreams highlighted the significant financing gaps that exist across sectors and markets. This theme was in full focus throughout our conversations at London Climate Action Week, New York Climate Week, and COP28 in Dubai, where we hosted and co-hosted several action-oriented sessions. At COP28 we sponsored the Start-Up Village located in the Green Zone, which enabled over 100 start-ups to demonstrate their various climate technologies on a world stage – including three Barclays SIC portfolio companies: ZeroAvia, GeoPura, and ECOncrete. PCAF Capital Markets working group Barclays has been an active member of the Partnership for Carbon Accounting Financials (PCAF) – an industry-wide initiative that aims to build consensus on approaches to carbon accounting, disclosure and portfolio alignment – since 2020. In 2023, and for the third year running, Barclays co-chaired the PCAF Capital Markets working group comprising eight other banks. The working group has developed a standard to account for the facilitated emissions associated with capital markets transactions, which was published in December 2023. The Standard (Part B) builds on the extensive work carried out by the working group over the past three years and follows on from the 2021 Discussion Paper, the 2022 Proposed Methodology document, and two public consultations. + Further details can be found at: carbonaccountingfinancials.com/files/ PCAF-PartB-Facilitated-Emissions-Standard-Dec2023.pdf Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) Engaging with industry External initiatives, signatories or memberships Additional information Multi-thematic Barclays PLC Annual Report 2023 127 Sustainable Markets Initiative Transition Plan Task Force United Nations Environment Programme - Finance Initiative LSE/Grantham Research Institute Ceres Taskforce on Nature-related Financial Disclosures Forum Glasgow Financial Alliance for Net Zero Net-Zero Banking Alliance Barclays is a member of the Sustainable Markets Initiative's (SMI) Financial Services Task Force (FSTF). The Sustainable Markets Initiative was launched in 2020 by His Majesty King Charles III, when he was Prince of Wales. Barclays has co-led the Net Zero working group since 2021 and in 2023 co-led the Nature-based Solutions (NbS) working group. We co-hosted a series of FSTF workshops at London Climate Action Week and New York Climate Week contributing towards the launch of the Coastal Nature-based Solutions Practitioner's guide in November 2023. In 2023 Barclays contributed to the Transition Plan Taskforce (TPT)'s publication of sector-agnostic and sector-specific guidance documents. This included taking part in the TPT Sandbox, participating in the Banking, Metals & Mining, Food & Beverage, Nature and Just Transition working groups, and providing expert reviews for the Oil & Gas working group. Barclays has been a member of United Nations Environment Programme – Finance Initiative (UNEP FI) for over 20 years and was a founding signatory of the UN Principles for Responsible Banking (PRB) as well as joining the Net-Zero Banking Alliance in 2021. From 2021 Barclays' Group Head of Sustainability has been a member of the global UNEP FI Banking Board and the European Regional Board, and our CEO joined the Leadership Council in 2022. Throughout 2023 Barclays has contributed to the PRB 2030 process, a strategic project to further develop the UN PRB framework, and participated in the Nature Target Setting Working Group – helping build guidance and inputting on case studies. Barclays joined over 40 financial institutions and stakeholders to form the Financing a Just Transition Alliance in 2021. In 2023 we contributed to a report titled 'Sowing seeds: How finance can support a just transition in UK agriculture', which was designed to increase understanding across the financial sector of how it can support a just transition in agriculture by mobilising more finance towards companies committed to and making progress to support a ‘just nature transition’. Barclays became a Founding Funder of the Just Transition Finance Lab, launched on 20 February 2024. Barclays has been an active member of the Ceres Company Network since 2019. In 2023 we partnered with Ceres to conduct a stakeholder engagement as a follow up to the research Ceres conducted in 2022 on our just transition strategy. We additionally co-hosted a series of just-transition-focused workshops at both New York Climate Week and COP28. Barclays is a member of the Taskforce on Nature-related Financial Disclosures (TNFD) Forum, a consultative network of institutional supporters who share the vision and mission of the TNFD. Throughout 2023 we actively provided feedback on the draft TNFD disclosure guidance, which was officially launched in September 2023. In 2023 Barclays contributed to the GFANZ Decarbonization Methodology working group, which at COP28 in December 2023 published a 'Technical Review Note on Scaling Transition Finance and Real-economy Decarbonization, a Supplement to the 2022 Net-Zero Transition Plan Report'. Barclays became a founding member of the Net-Zero Banking Alliance in 2021 and contributed to the development of NZBA guidelines throughout 2023. Barclays co-leads the NZBA Autos and Trucking Working Group, which published a white paper on emerging practice in climate target setting for automotive sector financing, and contributed to the NZBA Real-Estate Working Group – which published a similar paper in December 2023. Just transition Nature and biodiversity Climate and sustainability Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) Engaging with industry Industry collaboration Climate and sustainability Additional information Barclays PLC Annual Report 2023 128 Oxford Sustainable Finance Group & the UK Centre for Greening Finance and Investment Partnership for Carbon Accounting Financials PRA/FCA Climate Financial Risk Forum RMI's Center for Climate Aligned Finance World Business Council for Sustainable Development Center for Climate and Energy Solutions (C2ES) UK Business Climate Hub As part of Barclays' three-year partnership with Oxford University, we made progress on developing new datasets and methodologies for measuring emissions in the agriculture sector – which Barclays will leverage moving forward as it enhances its work in this area. Barclays has been a member of PCAF since 2020. During 2023 we co-chaired the Capital Markets Working Group of eight global banks – the work from which resulted in the publication of the PCAF Facilitated Emissions Standard (The Standard, Part B), which outlines how financial institutions should account for the emissions associated with the facilitation of capital markets activities. The Climate Financial Risk Forum (CFRF) brings together UK regulators and senior financial sector representatives to share their experiences in managing climate-related risks and opportunities. During 2023, Barclays chaired the Climate Financial Resilience Working Group. Barclays became a Strategic Partner of the RMI (formerly Rocky Mountain Institute) Center for Climate-Aligned Finance, which acts as an implementation partner to banks to align their investments with a net zero future, in 2022. In 2023 we participated in and hosted one of RMI's Alignment Forum in-person workshops, seeking to identify best practices within the financial sector. In Q3 2023 Barclays became a Founding Consortium Collaborator to support the expansion of RMI’s Oil Climate Index plus Gas – a public tool that uses a transparent, standardised methodology to estimate methane and other GHG emissions from equivalent barrels of oil and gas. RMI has currently modelled two-thirds of the world’s oil and gas assets. We also joined the joint RMI and UK Finance Transition Finance Alignment Forum. Barclays became a member of the Banking for Impact on Climate in Agriculture (B4ICA) in 2021 – an initiative convened by the World Business Council for Sustainable Development that brings together banks and expert partners to develop technical recommendations and practical solutions to align banks’ financial portfolios in the food, agriculture, and land-use space towards net zero and Paris Agreement goals. In 2023 we contributed to B4ICA's 'Foundational Practices for Banks: Base lining, net-zero target-setting and reporting financed emissions across the agriculture and food value chain'. Barclays joined the Center for Climate and Energy Solutions (C2ES) Business Environmental Leadership Council (BELC) in 2022. In 2023 we collaborated with C2ES on a range of issues, including participating in their technology working group and co-hosting an event at COP28 on supporting the global climate technology momentum. In the final quarter of 2023, Barclays partnered with the UK Business Climate Hub – an online portal supporting SMEs on their journey to net zero. Barclays is helping shape and enhance the resources the Hub provides to UK business, ensuring our SME clients' voices are heard and their needs met. This new partnership will help each SME client understand why sustainability is important for their business and what 'good' looks like in the context of their industry. + Barclays' register of our engagement with industry initiatives, working groups and memberships can be found at: home.barclays/sustainability/esg-resource-hub/ reporting-and-disclosures/ Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Implementing our Climate Strategy (continued) TCFD Strategy Recommendation (b) Barclays' approach to public policy We have a responsibility to engage with governments and policymakers constructively, while remaining politically neutral. Transparency and governance As a major economic and societal contributor to the communities in which we operate – whether via the products we offer, the customers and clients we serve, the colleagues we employ, or the contribution we make through our community investment programme – we believe it is also important to contribute to relevant public policy debates. We seek to engage constructively with policymakers in jurisdictions where the firm operates, including with governments, legislatures, regulators and other organisations. In our discussions we seek to make contributions that are accurate, honest and evidence-based. Barclays’ advocacy and engagement activities, including direct and indirect lobbying, must also be undertaken in line with our internal controls – including Barclays’ code of conduct (The Barclays Way), which requires that "where we engage with governments and regulators on issues relevant to our business, we are honest and transparent in our communication with them". The Barclays Way also provides detailed guidance on speaking up and raising concerns, directing employees to speak up if they see "behaviours and practices that are not in line with our Barclays Values" – making clear that speaking up, whether formally or informally, will not come at a consequence to them. We also believe that Barclays should only engage on issues where we have a legitimate interest – for example where there is a consequence for our business, our customers and clients, or our colleagues. Barclays’ Group Head of Strategic Policy is responsible for the co-ordination and oversight of public policy advocacy. Barclays retains the services of public affairs agencies in certain jurisdictions. These agencies primarily assist with political monitoring and strategic advice. We work very closely with these agencies on a day-to-day basis, to help ensure that the Strategic Policy Group has oversight of the work being undertaken for Barclays. Advocacy with public officials in the US is publicly reported, as required by the Lobbying Disclosure Act. Barclays also discloses its EU advocacy activities on the European Commission’s Transparency Register. In addition, Barclays is a member of a number of trade associations globally. These associations work to represent their members, and for many this involves undertaking work to shape industry’s collective response to various public policy issues. We seek to be an engaged and productive member of all associations in which Barclays participates, predominantly through the committees and working groups formed by each. Active participation in the discussions and working groups facilitated by these trade associations helps encourage the adoption of policy positions consistent with Barclays’ public policy objectives. Where we identify divergence on key policy matters we seek to engage and influence these positions. The Strategic Policy Group also supports senior executives occupying trade association board positions, as appropriate. As part of our commitment to transparency we publish a range of information on our Public Policy Engagement website, including certain details regarding the aforementioned agencies and trade association memberships. We also publish details of Barclays’ bilateral responses to material government and public policy consultations on certain issues with which we are principally engaged, in the UK and EU, either in full summary or part. In other jurisdictions, including across Asia and the US, responses to public consultations are published on the respective government websites. + Our Public Policy Engagement website can be found at: home.barclays/sustainability/esg-resource-hub/reporting- and-disclosures/public-policy-engagement/ Climate policy engagement Barclays seeks to proactively engage in climate and sustainable finance-related public policy conversations and development, directly and indirectly, consistent with our business strategy – including our ambition to be a net zero bank by 2050 and our commitment to aligning our financing with the goals and timelines of the Paris Agreement. We proactively pursue opportunities for senior- level dialogue with policymakers to demonstrate private sector leadership on sustainable finance and the energy transition. We provide feedback, as an individual institution and via trade associations to relevant consultation processes launched by standard setters, multilateral organisations and NGOs, including those that could inform future policy recommendations. We also engage with governments and other key stakeholders to promote policies that facilitate greater investment in climate solutions. This includes participating in key international and domestic forums – such as the United Nations Climate Change Conference (COP28) and the UK’s Global Investment Summit 2023 – to promote net-zero-aligned public policy at senior levels. Barclays endeavours to support the development of public policy positions that facilitate sustainable finance and the broader energy transition through proactive engagement in relevant trade association working groups, where we seek to promote positions consistent with our ambition to be a net zero bank by 2050. We engage with many trade associations on climate issues and will continue to do so to promote our net zero objectives. Reflective of the pace of developments and regional differences in approaches to sustainability, there can be diverging views within trade associations. Many of these trade associations also do not focus exclusively on Barclays PLC Annual Report 2023 129 sustainability, but rather engage across the full breadth of financial services-related policy – and do not have stated positions in relation to net zero. Where misalignment between an association’s advocacy position and Barclays’ own net zero ambitions is identified, we seek to manage this appropriately by addressing it through proactive engagement where possible. Where there is a material and ongoing difference identified through our routine engagement, Barclays may publicly dissent from a trade association’s position. Should a trade association adopt a material position that, following engagement, remains irreconcilable with our Values or strategy, we can exercise the option to end our membership. In 2023 we undertook another internal review of the climate policy positions of certain material trade associations, including their alignment with our ambition to be a net zero bank by 2050 and our commitment to aligning our financing with the goals and timelines of the Paris Agreement. A list of these trade associations in scope can be found on our Public Policy Engagement web page. This review was informed by publicly available information on each trade association’s website, which could include climate policy position statements and, where directly related to climate, consultation responses, commission reports and statements from an association’s senior leadership. For a number of trade associations in- scope of the review, we were unable to identify a clearly articulated position on net zero. Of those with a clear position, the majority were considered to be aligned or partially aligned with our net zero by 2050 ambition. In 2023 we began to proactively engage with trade associations to better understand their climate policy positions and activities, and we will continue to keep our approach under review. Resilience of our strategy TCFD Strategy Recommendation A: TCFD Strategy Recommendation B: TCFD Strategy Recommendation C: Describe the climate-related risks and opportunities the organisation has identified over the short, medium, and long term. Describe the impact of climate-related risks and opportunities on the organisation’s businesses, strategy, and financial planning. Describe the resilience of the organisation’s strategy, taking into consideration different climate- related scenarios, including a 2°C or lower scenario. Risks and opportunities Risks Opportunities 66 67 70 Implementing our climate strategy Achieving net zero operations Operational footprint dashboard All other narrative Reducing our financed emissions BlueTrack dashboard TM All other narrative Financing the transition Sustainable finance dashboard All other narrative Working with our clients Embedding Climate and Sustainability into our business Just transition and nature and biodiversity Engaging with industry Barclays' approach to public policy Resilience of our strategy Scenario analysis Barclays’ resilience to climate scenarios Climate stress tests 2023 Enhancements and beyond Challenges and limitations  Macro-dependencies and objectives  Important information/disclaimers 130 131 132 132 134 135 136 137 72 73 75 76 80 88 89 101 103 104 107 121 124 126 129 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Resilience of our strategy Scenario analysis Climate scenario analysis forms a key part of Barclays' approach to assessing and quantifying the impact of physical and transition climate risks on the Bank's portfolios¹. It represents a tool in better understanding the significant uncertainty that arises from how climatic weather patterns will change, as well as the rapidly evolving nature of the climate transition from government policies, new technologies and changing individuals' sentiment. Through climate scenario analysis, these risks and uncertainties can be translated into financial impacts to the Bank, allowing Barclays to better understand the resilience of its business strategy. History and evolution Since 2018 Barclays has progressively developed its internal scenario analysis capabilities, developing new climate assessment methodologies, running internal targeted exercises with external subject matter experts, and participating in regulatory climate stress- testing. Barclays PLC Annual Report 2023 131 Barclays continues to build its use of scenario analysis to explore and further understand the evolving landscape – identifying areas of risks and opportunities – to challenge existing assumptions of future climate pathways and measure and size of the risks of climate change to the Bank. Note 1 Informed by the Basel Committee on Banking Supervision's 2021 'Climate-related financial risks - measurement methodologies' report, Barclays considers climate scenario analysis as forward- looking projections of climate risk outcomes, with climate stress- testing a subset of this where the exercise is designed to evaluate financial resiliency to a severe but plausible scenario. Internal short-term transition scenario • Short-term assessment exploring the potential transition risk impact of a ‘Climate Minsky Moment’ with a rapid market correction, followed by broader macroeconomic shocks. • Scenario narrative and shocks informed by external publications such as the RA insurance climate stress and DNB energy transition stress test. Exploratory climate scenarios by the Bank of England (BoE) • Barclays participated in the BoE’s Climate Biennial Exploratory Scenario. • Stress test covers three long-term scenarios: Early Action, Late Action and No Action. • Assessments focused on credit risk impacts to wholesale and retail portfolios. Stress-testing and integration • Quantitative integration of stress- testing results into internal capital adequacy and CET1 assessments. • Conduction of two short-term climate stress tests, including a physical tipping point (H1) and full macroeconomic expansion (H2). • Development of new climate-aware models and methodologies. 2018 2019 2020 2021 2022 2023 External case studies through UNEP FI • Case study exercises covering Power, Utilities, Oil and Gas and Residential Real Estate. • Scenario assessment based on REMIND 2°C scenario, assessing a specific client set in each sector. • Judgement-led and simplistic approach to calculate climate probabilities of default. Internal climate scenarios informed by NGFS • Long-term climate internal stress test. • Scenario narrative and shocks informed by NGFS Disorderly Transition, combined with internal scenario of comparable sensitivity (pre-COVID IFRS 9 Downside 1). • Second assessment considered incremental physical risk impact from the Hot House World scenario. Framework, regulatory and internal scenario analysis • Barclays participated in regulatory stress-tests such as ECB CRST. • Conduction of bespoke internal scenario analysis exercise. • Development of an internal framework to structure scenario-based climate risk measurement exercises. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Resilience of our strategy (continued) Barclays PLC Annual Report 2023 132 TCFD Strategy Recommendation (c) Barclays' resilience to climate scenarios Based on the exercises undertaken to date, our understanding is that Barclays' strategy remains resilient to climate scenarios. This assessment includes consideration of two climate stress tests completed in 2023, with further details included in subsequent sections of this chapter. In addition Barclays considers the impact of climate scenarios within its financial planning process, including the use of a baseline climate scenario within the Medium Term Planning process and the financial impacts from Barclays meeting its sectoral BlueTrackTM targets, aligned to 1.5°C scenario pathways. Finally, Barclays has considered the impact of climate scenarios within its assessment of Expected Credit Losses reported under IFRS9, for year-end 2023. More detail on these two elements can be found on page 121 and 310 respectively. Nevertheless, given the evolving climate landscape, we seek to further enhance our capabilities and modelling in order to refine our understanding of the Bank's resilience to various climate scenarios, particularly given high uncertainty within climate scenario analysis. The aims of our two climate stress tests, each with their own scenario, were to assess Barclays' financial resiliency to climate risks over and above the financial impact of existing macroeconomic internal stress tests – and the extent to which Barclays would remain within risk appetite. Both stress tests were designed as Bank-wide exercises, conducted over a five-year time period, to assess an accelerated transition and specific climate vulnerabilities to the Bank's business plan. These exercises include an assessment of the financial impact to our clients of a structural decline in fossil fuel demand and consumption and shift towards low-carbon products and services. The two scenarios have been internally designed with consideration of Barclays' specific portfolio vulnerabilities. External scenarios such as those provided by the Network for Greening the Financial System (NGFS), while offering granular and detailed scenario information for financial institutions, tend to focus on longer trends and display limited volatility, with assumptions that may be less relevant to our specific businesses. As such we have designed scenarios with a greater focus on short-term tail risks and volatility to assess Barclays' resiliency. Results of the two exercises indicate a c.10% drag on the Bank’s profitability, falling in the range projected for the UK banking sector by the Bank of England's 2021 Climate Biennial Exploratory Scenario (CBES). In addition the exercises represent a c.10-20% uplift in losses incurred in existing macroeconomic internal stress tests. In order to manage and mitigate these potential risks, Barclays has for the first time quantitatively integrated the results of its stress tests into its internal capital adequacy assessments, ensuring the Bank remains appropriately capitalised for climate risks, and to ensure business resilience. The results of our exercises have highlighted risks within our key businesses to either Physical Risk, Transition Risk or both. We have aggregated results for Barclays' three main business units, Barclays International, Retail and SME Banking, and Head Office, in the heatmap on the right for the stress test most recently completed. The assessment indicates the relative impact from the climate scenario against Barclays' medium-term plan, calculated as the additional losses compared to the expected business cycle. Losses appear highest in the Barclays International segment relative to the baseline. This is predominantly attributed to our Global Banking & Markets business, driven by exposure to more carbon intensive sectors that are most impacted from the fast transition scenario, such as the introduction of carbon pricing schemes. In addition, cascading transitional impacts drive up unemployment, stressing our cards portfolios. Meanwhile, within Retail, UK residential real estate exposures face increased acute physical events and additional energy remediation costs. Further detail of these exercises is included in subsequent sections. Business Barclays International Retail and SME Banking Head Office Impacts Medium Low Low Climate stress tests Two climate stress tests have been conducted during 2023, each with their own short-term scenario, to assess the Bank's financial resiliency to transition and physical risks. The H2 exercise builds upon the learnings from H1, enhancing climate stress testing design, integration, and execution as part of the Bank's planning and stress-testing framework. Key developments include full macroeconomic scenario expansion, the broadening of assessment scope, and the refinement of climate methodologies. Climate stress test (H1) In the first half of 2023 Barclays performed a Bank- wide climate stress test, which tested the impact of a tipping point event, with subsequent shifts in consumer behaviour and financial market activity. The scenario began with a substantial weakening of the Atlantic Meridional Overturning Circulation, leading to a disruption in heat transfer and changes in atmospheric circulation – resulting in direct physical risk events across the globe. Structural changes in weather patterns drive indirect physical risks, and industries reliant on a stable climate begin to deteriorate. As climate disasters manifest, societal actors including governments, markets, consumers and NGOs take action in attempts to curb further materialisation of climate risks. This exercise was used to test the Bank's resilience to credit, market, operational, liquidity, and reputational risks arising from climate change. The scenario was developed internally, based on the latest scientific research from the IPCC, with review by Oxford University. Results and insights Overall, losses represent a c.10% drag on profits, falling in the range projected in the Bank of England's CBES. Climate impacts were driven notably by fossil-fuel-intensive industries and assets, and those sectors where consumers 'vote with their feet' and change spending patterns to more sustainable options. While physical risks losses represented a lower portion of overall losses across businesses, physical risks are significant and concentrated in industries with high reliance on buildings and infrastructure. Climate internal stress test (H2) During the second half of 2023 Barclays undertook a climate stress test, part of an annually scheduled climate stress-testing programme, in line with existing internal macroeconomic stress tests. The formal integration of climate stress- testing into the Bank's Stress Testing Framework is an important development and further embeds ongoing management of climate risks, enables consistent analysis of how these risks change through time, and incorporates into assessments of the Bank's risk appetite. In order to appropriately assess Barclays' resiliency to climate-related changes, we assess scenarios against our internal climate risk register, to select those most relevant to both self-identified areas of risk and those that require further exploration. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 133 Resilience of our strategy (continued) TCFD Strategy Recommendation (c) Scenario Stage 1: Stage 2: Stage 3: The scenario narrative was designed over a five-year timeframe aligned with the Bank's Medium Term Planning and Internal Stress Testing scenarios. Specific variables were expanded using a combination of models and Subject Matter Expert (SME) judgement by Barclays' internal Scenario Expansion Team to assess both physical and transition Climate Risks. The exercise is designed to complement conventional Barclays macroeconomic stress-testing, and seeks to understand: 1) How climate can influence conventional macroeconomic stressed environment pathways and severity; and 2) The incremental impact of climate above macroeconomic stressed pathways. The climate scenario involves initial policy announcements that trigger immediate asset repricing, while more stringent policy requirements unfold over a longer time horizon – dampening recovery in the outer years as depicted in the below chart through stages 1, 2, and 3. Against this backdrop the scenario also includes consideration of physical risk, notably hazards of which Barclays' clients are most susceptible to such as flood and drought. Implications and policies of the three stages are outlined below: a) Consumer preferences shift toward greener products and practices while consumption is cut to cope with the recessionary environment. Behavioural shifts are pronounced at sector level as consumers turn away from firms who finance carbon-heavy industries. b) Investors reassess their participation with certain firms. Those with heavy exposure to brown income and/or assets, combined with poor transition plans, are negatively impacted in equity markets – with capital reallocated to greener firms. c) In the UK, existing proposals to tighten EPC minimum standards are accelerated, bringing forward the compliance date for Buy-to-Let, Social Housing, and Commercial Real Estate buildings to be at EPC C or above. a) As the economy moves past peak recession, large parts of it start to consider how it can build back greener. Under continued behavioural pressure from consumers and investors, large- scale plans for transitioning to a more sustainable business model occur where possible. The return of capital on these plans and the associated delay to recovery leads to a slight prolonging of the stress, but the creation of a transition plan leads to confidence in financial markets by investors. b) Additional policies in the UK and US are accelerated or announced. For example, the Government will rapidly increase the investment and deployment of EV charging infrastructure to support faster transition in the automotive sector. a) The EU and UK governments ramp up their existing emissions trading schemes to achieve 1.5C, with a carbon price shock increasing $150/ tCO2 within 12 months from 2026 and continuously increasing. This dampens economic recovery and leads to prolonged higher inflation as production costs are higher due to increased energy costs. However, to some extent, this is offset by both public and private investment to enable faster transition. b) Introduction of Carbon Border Adjustment Mechanisms, resulting in supply-side shocks, a reduction in exports, and other trading frictions. Scenario impact (Illustrative only) + A series of risk events lead to a drastic shift in public sentiment, demanding a policy response. Faced with a severe economic recession, impactful policies are announced to take effect during economic recovery. However it leads to an immediate repricing of assets. Existing government climate policies come into affect and contribute to the recovery, as these policies are largely investment and funding which will spur on economic activity. More stringent government climate policies - the expansion of the Emissions Trading Scheme (ETS) and the rapid introduction of a Carbon Border Adjustment Mechanism (CBAM) - come into effect. This induces a carbon price shock and leads to a dampened recovery. - Jump-off Year 1.5 Year 2.5 Stress Recovery Dampened recovery — Economic Stress Scenario — Climate Stress Scenario Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Resilience of our strategy (continued) TCFD Strategy Recommendation (c) The scenario will have significant impacts on Barclays, including: 1) Amplified market shocks: additional to existing macroeconomic shocks, there will be further equity and credit shocks for brown industries and financiers, as a result of immediate repricing. 2) Amplified credit deterioration: additional credit risk on brown industries as a result of lower earnings expectations and refinancing risks. 3) Increase in frequency of physical risk events: throughout the time horizon, there is an increase in the occurrence of physical hazards such as flood, hurricanes and droughts. Following the above narrative, scenario variables are provided with varying levels of granularity. For example, global variables – notably demand in climate-sensitive sectors such as Energy, Power and Automotive – national variables – including unemployment rates, GDP, HPI, CPI, government legislation on EPC with further distinction between commercial and residential real estate – and property level variables, including subsidence and flood. Calibration is guided by the narrative with consideration for compounding effects of existing economic downturn and climate stresses, informing the shape and magnitude of variable calibration over the scenario horizon. Material technological development has not been assumed within the economic projections, given the immediate and short time horizon of the scenario. Variables are leveraged to assess impacts on Credit Risk, Market Risk, Counterparty Credit Risk, Underwriting, Non- traded Market Risk, Income and Balance Sheet, Expenses, Pension, Liquidity, and Capital across Barclays – with a focus on UK, US, and EU regions. Results and insights Overall, losses are comparable with those seen in H1, also representing a c.10% drag on profits. While losses are significant, they remain manageable within the Bank's existing risk profile. Within Barclays International, losses were driven mostly by companies operating in heavily emission-intensive industries due to rising carbon prices over the scenario, or those within sectors where demand for products and services rapidly fall due to consumer behaviour shifts or wider decarbonisation of the economy. In addition, market pressures and government policies on low-energy-efficiency Commercial Real Estate leads to deterioration in these markets both in the UK and US. In addition, rising unemployment rates across Barclays' major operating geographies cause negative impacts on consumer affordability through the loss of jobs and a weakened macroeconomic environment. Nevertheless, Barclays remains resilient to these additional losses, and current risk management mitigates these macroeconomic drivers. Retail and SME segment is impacted by higher frequency of acute events with real estate and agricultural assets susceptible to physical risks such as drought and flood. Despite this, the portfolios remain resilient due to availability of household insurance and the strong loan-to- value profile of the lending. Sensitivity analysis was conducted to severely constrained household insurance availability, with Barclays remaining resilient, albeit noting small populations would be impacted significantly. Barclays PLC Annual Report 2023 134 We will continue to refine and adapt our insurance assumptions to reflect ongoing changes in market expectations. In addition, while transition policies on emissions reduction and energy efficiency improvements do yield greater impacts, especially as customers begin to price energy performance more explicitly in their decisions, the resultant drag on annual profits remains manageable. We acknowledge, however, that further advances in modelling capability and data availability are needed to fully understand the extent of these losses, given high uncertainty in climate scenario analysis. For example, the scenario does not capture compounding and interaction effects between physical and transition risks that could potentially amplify such loss. As such, Barclays' annual climate stress-testing cycle is in place to address these uncertainties, by testing our business resilience under different climate scenarios and continuously refining our climate methodologies. 2023 Enhancements and beyond During 2023 Barclays made several key enhancements across climate scenario development, climate risk modelling, and the ways we embed climate learnings into our risk management. • Climate scenarios are designed and developed with our internal specialist scenario expansion team, leveraging the tools and approaches of the existing scenario expansion processes and supplementing these with specific climate analysis. This ensures consistency in climate scenario design alongside existing regulatory internal scenarios, as well as detailed and granular climate scenario expansion. • Climate risk models are developed according to Barclays' Climate Credit Risk Adjustment Framework, such that model execution across our suite of climate models follows a consistent process – adhering to defined principles and integrated strategically with our existing model suite whilst still having the flexibility to include portfolio-specific constraints and characteristics. Although for stress-testing purposes Barclays' focus remains on five-year scenarios aligned with our usual planning horizon, models in development are designed to enable assessment of longer horizons – 10 years or longer – should we decide to explore these in the future. Climate Credit Risk Adjustment Framework Further design and piloting of Barclays' climate risk model methodology is underway, focusing on integrating new climate modelling techniques into the Bank's existing financial analysis processes. The target state is a flexible and adaptable process that can support various modelling techniques and allow us to test a wide range of possible future scenarios. Estimates of incremental credit risk spreads will be integrated with Capital, Impairment and Stress Testing Models to quantify climate risk. Residential Real Estate We have continued to improve our understanding of how physical and transition risks could impact our Mortgages portfolio in the UK, reflecting on learnings in previous scenario analysis exercises such as the Bank of England's Climate Biennial Exploratory Scenario, engaging with specialist data providers, and undertaking quantitative analysis of the impacts of climate risks. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 135 Resilience of our strategy (continued) TCFD Strategy Recommendation (c) Climate scenario Property data Customer data Insurance Flood Subsidence EPC upgrade Additional costs Value shock Loan to Income Loan to Value Corporates The Barclays Corporate Transition Forecast Model was first published in 2021. We will be doing further work during 2024 to update and enhance this model. Enhancements will include improving geographical granularity by leveraging asset-level data, incorporating sub-sector specific drivers, considering interaction of physical and transition risks as one, and addressing the known enhancements as published in 2021. + Further details on The Barclays Corporate Transition Forecast can be found at: home.barclays/content/dam/ home-barclays/documents/citizenship/ESG/2021/Corporate- Transition-Forecast-Model-2021.pdf PD spread LGD spread Challenges and limitations n Modelled n Input data n Feeders/Scenarios The focus of physical risk analysis has been on understanding the impacts of flood and subsidence, and considering these at a property- specific level – including the interaction of these risks and insurance provision, and how impacts may lead to changes in property values and our customers' affordability. For transition risks, the potential costs from energy remediation action taken by customers are considered – such as upgrading their properties' EPC rating in favour of more energy efficient homes in consideration of energy costs and accounting for changes in property valuation across the market. The uncertainty around the regulatory landscape for these risks is high, and Barclays continues to try and improve its understanding of how EPC regulation could feed through to customer impacts. The schematic below outlines the Climate Mortgage model. The impact of climate physical and transition drivers at a customer level are assessed, yielding probability of default (PD) and loss given default (LGD) spreads that are fed downstream into our existing stress-testing models. The Residential Real Estate Model will act as a pilot implementation for the Climate Credit Risk Adjustment Framework. Over time, we intend to incorporate additional climate risk drivers such as coastal flooding and storm damage, and refine modelling of customer behaviour in this market as the evidence on how customers respond to climate-related risks becomes apparent. Having undertaken a number of climate scenario analysis exercises, Barclays has gained a greater understanding of the challenges and nuances of climate modelling and continues to develop new and enhance existing tools for scenario analysis and stress-testing. Data There exist inherent challenges in climate modelling due to limitations in data quality and availability, given the short history of climate assessments within the financial services industry. • Data coverage is often lacking, where a subset of assets may not have the appropriate information publicly disclosed. Climate scenario risk analysis requires approaches and tools that are more granular (e.g. focus on company-level analysis), which differs from more traditional stress-testing exercises conducted at portfolio or sector level. This creates a need for more granular data that Barclays may not typically have maintained • While high data granularity is desirable to model client specific features, the balances between high data granularity and the additional insights provided must be investigated to assess the appropriate level of modelling • Data coherence issues may present inconsistencies in modelling. Emissions data is often one-year lagged, thus where the latest quarter/year financials are available, the emissions data may not be reflective of the company's operations, especially where there has been substantial growth or decline, mergers and acquisitions or other special activities. Scenario There exist inherent uncertainties with scenario design largely attributed to limited history of the interactions between climate risks and the economy. • Timing and interactions of physical and transition risks can greatly impact the Bank's assessment of capital adequacy and resilience. Assumptions around such compounding effects, while nuanced, are critical to our loss assessment and subsequently risk management processes and business strategy • There is a significant level of uncertainty with climate stress-testing projections in (i) how the scenario will manifest; (ii) how customers and clients will react; and (iii) the final loss quantification • An understanding of compounding risks and feedback loops between financial systems, the economy, and climate risks remains a challenge, given the lack of historical precedent of such interactions. Over longer time horizons, it becomes increasingly difficult to capture the range of second-order effects as physical and transition risks evolve, assess the rate in which risks manifest or subside, or identify inflection points. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Resilience of our strategy (continued) Barclays PLC Annual Report 2023 136 • Enhancing attractiveness of technological innovations for lenders: A key commercial constraint on the scalability of climate technologies is access to cost-competitive capital. Improving risk-adjusted returns is required to incentivise private financial flows towards nascent technologies and developing nations – essential to limit global warming to 1.5°C. Blended finance mechanisms have potential to unlock large quantities of private investment when both public and philanthropic funds provide first loss tranches. The subsequent adjusted risk-return profiles can make previously high-risk investments marketable + Barclays is committed to scaling climate solutions through our Sustainable Impact Capital portfolio, with a mandate to invest up to £500m in global climate tech start-ups by the end of 2027. For further information see page 117. TCFD Strategy Recommendation (c) Macro-dependencies and objectives We consider the following areas to represent some of the macro- dependencies that may impact our clients, customers and suppliers, and thus our ability to deliver our Climate Strategy. • Enhancing policy clarity in the real economy: Comprehensive, economy-wide decarbonisation policies are required across sectors and regions. The absence of clearly defined milestones for full decarbonisation at a national level introduces ambiguity over the channelling of financial resources to ensure an orderly and just transition • Optimising carbon-pricing mechanisms: A comprehensive carbon-pricing scheme is a key lever to address the current market failure of externalities from GHGs emissions. The UK and EU announcements for a carbon border adjustment mechanism (CBAM) will go some way to addressing this dependency. However, IMF research¹ shows prices (avg $6/ tCO2) are currently insufficient to achieve 1.5°C or 2°C targets Note: 1 imf.org/en/Blogs/Articles/2022/07/21/blog-more-countries- are-pricing-carbon-but-emissions-are-still-too-cheap • Addressing sector-specific challenges: • Global harmonisation of regulation: To date, an increasing number of countries and territories have some degree of mandatory ESG disclosure. Non-financial regulatory requirements are necessary for investors to accurately assess climate-related risks – however, major jurisdictions risk hindering the transition through regulatory fragmentation. As a bank with a global presence, interoperability of regulatory frameworks is essential to enable focused progress towards net zero. In addition to the risks arising from our clients' and suppliers' transitions, we are also dependent on wider market and geopolitical developments outside our control. For example, progress may be impacted by geopolitical developments that result in energy supply pressures or the varying pathways individual companies take to transition. Myriad sector-specific challenges persist. This year a backlog of grid connectivity requests for new renewable power projects highlighted the complexity of a transition to net zero. Delays to approval for low-carbon projects impacts investor confidence, slowing the transition + For more information on sector-specific challenges and dependencies, see BlueTrackTM sector pages 92 to 99. • Cultivating consumer confidence and investment incentives: Increased confidence in the multi-faceted and potential financial benefits of decarbonisation among society would help spur action. Clear messaging and incentives for households and businesses to generate tangible returns on investment in low-carbon products is critical for driving the transition towards net zero, particularly in sectors reliant on consumer behaviour such as Housing and Agriculture • Improving access to sustainability-related risk and impacts data: Accurate assessments of client data, including Scope 3 emissions, is needed to enable a data-driven approach required to mitigate non-financial risks and plot the path to net zero. The evolving nature of corporate and financial sector reporting, and the persistent challenges stemming from data gaps, can hinder progress towards these goals + Barclays remains engaged in the development of mechanisms to bridge these gaps, highlighted by our work with the Transition Plan Taskforce to set out transition plan disclosure guidance. For further details see page 61. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Important information/Disclaimers Information provided in climate and sustainability disclosures What is important to our investors and stakeholders evolves over time, and we aim to anticipate and respond to these changes. Disclosure expectations in relation to climate change and sustainability matters are particularly fast moving, and differ from more traditional areas of reporting including in relation to the level of detail and forward-looking nature of the information involved and the consideration of impacts on the environment and other persons. We have adapted our approach in relation to the disclosure of such matters. Our climate and sustainability disclosures take into account the wider context relevant to these topics, which may include evolving stakeholder views, the development of our climate strategy, longer timeframes for assessing potential risks and impacts, international long-term climate- and nature-based policy goals and evolving sustainability-related policy frameworks. Our climate and sustainability disclosures are subject to more uncertainty than disclosures relating to other subjects, given market challenges in relation to data reliability, consistency and timeliness – the use of estimates, judgements and assumptions which are likely to change over time, the application and development of data, models, scenarios and methodologies, the change in regulatory landscape, and variations in reporting standards. These factors mean disclosures may be amended, updated, and recalculated in future as market practice and data quality and availability develops, and could cause actual achievements, results, performance or other future events or conditions to differ, in some cases materially, from those stated, implied and/or reflected in any forward-looking statements or metrics included in our climate and sustainability disclosures. We give no assurance as to the likelihood of the achievement or reasonableness of any projections, estimates, forecasts, targets, commitments, ambitions, prospects or returns contained in our climate and sustainability disclosures and make no commitment to revise or update any such disclosures to reflect events or circumstances occurring or existing after the date of such statements. Disclaimers In preparing the climate and sustainability content within the Barclays PLC Annual Report wherever it appears, we have: • Made certain key judgements, estimations and assumptions. This is, for example, the case in relation to financed emissions, portfolio alignment, classification of environmental and social financing, operational emissions and sustainability metrics, measurement of climate risk and scenario analysis Barclays PLC Annual Report 2023 137 • Continued (and will continue) to review and develop our approach to data, models, scenarios and methodologies in line with market principles and standards as this subject area matures. The data, models, scenarios and methodologies used (including those made available by third parties) and the judgements, estimates and/or assumptions made in them or by us are rapidly evolving, and this may directly or indirectly affect the metrics, data points, targets, convergence points and milestones contained in the climate and sustainability content within the Annual Report. Further, changes in external factors which are outside of our control such as accounting and/or reporting standards, improvements in data quality, data availability, or updates to methodologies and models and/ or updates or restatements of data by third parties, could impact – potentially materially – the performance metrics, data points, targets, convergence points and milestones contained in the climate and sustainability content within the Annual Report. In future reports we may present some or all of the information for this reporting period (including information made available by third parties) using updated or more granular data or improved models, scenarios methodologies, market practices or standards. Equally, we may need to re- baseline, restate, revise, recalculate or recalibrate performance against targets, convergence points or milestones on the basis of such updated data. • Used climate and sustainability data, models, scenarios and methodologies we consider to be appropriate and suitable for these purposes as at the date on which they were deployed. This includes data, models, scenarios and methodologies made available by third parties (over which we have no control) and which may have been prepared using a range of different methodologies, or where the basis of preparation may not be known to us. Methodologies, interpretations or assumptions may not be capable of being independently verified and may therefore be inaccurate. Climate and sustainability data, models, scenarios and methodologies are subject to future risks and uncertainties and may change over time. Climate and sustainability disclosures in this document, including climate and sustainability-related data, models and methodologies, are not of the same standard as those available in the context of other financial information and use a greater number and level of judgements, assumptions and estimates, including with respect to the classification of climate and sustainable financing activities. Climate and sustainability disclosures are also not subject to the same or equivalent disclosure standards, historical reference points, benchmarks or globally accepted accounting principles. Historical data cannot be relied on as a strong indicator of future trajectories in the case of climate change and its evolution. Outputs of models, processed data, scenario analysis and the application of methodologies will also be affected by underlying data quality, which can be hard to assess, or challenges in accessing data on a timely basis Barclays PLC Annual Report 2023 138 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Important information / Disclaimers (continued) Such updated information may result in different outcomes than those included in the Annual Report. It is important for readers and users of the Annual Report to be aware that direct, like-for-like comparisons of each piece of information disclosed may not always be possible from one reporting period to another. The “Implementing our climate strategy” section of the Annual Report highlights where information in respect of a previous reporting period has been updated. Our principles- based approach to reporting financed emissions data (see page 84) sets out when financed emissions information in respect of a prior year will be identified and explained • Included in the Annual Report a number of graphics, infographics, text boxes and illustrative case studies and credentials which aim to give a high-level overview of certain elements of the climate and sustainability content within the Annual Report and improve accessibility for readers. These graphics, infographics, text boxes and illustrative case studies and credentials are designed to be read within the context of the Annual Report as a whole. KPMG LLP has performed limited independent assurance over selected climate and sustainability content, which has been marked Δ with the symbol . The assurance engagement was planned and performed in accordance with the International Standard on Assurance Engagements (UK) 3000 Assurance Engagements Other Than Audits or Reviews of Historical Financial Information and the International Standard on Assurance Engagements 3410 Assurance of Greenhouse Gas Statements. A limited assurance opinion was issued and is available at the website link below. This includes details of the scope, reporting criteria, respective responsibilities, work performed, limitations and conclusion. No other information in the Annual Report has been subject to this external limited assurance. There are a variety of internal and external factors which may impact our reported metrics and progress against our targets, convergence points and milestones. + The limited assurance opinion is available at: home.barclays/ sustainability/esg-resource-hub/reporting-and-disclosures/ Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Forward-looking statements Barclays PLC Annual Report 2023 139 This document contains certain forward-looking statements within the meaning of Section 21E of the US Securities Exchange Act of 1934, as amended, and Section 27A of the US Securities Act of 1933, as amended, with respect to the Group. Barclays cautions readers that no forward-looking statement is a guarantee of future performance, and that actual results or other financial condition or performance measures could differ materially from those contained in the forward-looking statements. Forward-looking statements can be identified by the fact they do not relate only to historical or current facts. Forward-looking statements sometimes use words such as ‘may’, ‘will’, ‘seek’, ‘continue’, ‘aim’, ‘anticipate’, ‘target’, ‘projected’, ‘expect’, ‘estimate’, ‘intend’, ‘plan’, ‘goal’, ‘believe’, ‘achieve’ or other words of similar meaning. Forward-looking statements can be made in writing but may also be made verbally by directors, officers and employees of the Group, including during management presentations, in connection with this document. Examples of forward-looking statements include, among others, statements or guidance regarding or relating to the Group’s future financial position, business strategy, income levels, costs, assets and liabilities, impairment charges, provisions, capital, leverage and other regulatory ratios, capital distributions – including policy on dividends and share buybacks – return on tangible equity, projected levels of growth in banking and financial markets, industry trends, any commitments and targets – including ESG commitments and targets – plans and objectives for future operations, and other statements that are not historical or current facts. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Forward-looking statements speak only as at the date on which they are made. Forward-looking statements may be affected by a number of factors, including, without limitation: changes in legislation; regulations, governmental and regulatory policies, expectations and actions, voluntary codes of practices, and the interpretation thereof; changes in International Financial Reporting Standards and other accounting standards, including practices with regard to the interpretation and application thereof and emerging and developing ESG reporting standards; the outcome of current and future legal proceedings and regulatory investigations; the Group’s ability along with governments and other stakeholders to measure, manage and mitigate the impacts of climate change effectively; environmental, social and geopolitical risks and incidents, pandemics and similar events beyond the Group’s control; the impact of competition in the banking and financial services industry; capital, liquidity, leverage and other regulatory rules and requirements applicable to past, current and future periods; UK, US, Eurozone and global macroeconomic and business conditions, including inflation; volatility in credit and capital markets; market-related risks such as changes in interest rates and foreign exchange rates; reforms to benchmark interest rates and indices; higher or lower asset valuations; changes in credit ratings of any entity within the Group or any securities issued by it; changes in counterparty risk; changes in consumer behaviour; the direct and indirect consequences of the conflicts in Ukraine and the Middle East on European and global macroeconomic conditions, political stability and financial markets; political elections; developments in the UK’s relationship with the European Union (EU); the risk of cyberattacks, information or security breaches, technology failures or other operational disruptions and any subsequent impacts on the Group’s reputation, business or operations; the Group’s ability to access funding; and the success of acquisitions, disposals and other strategic transactions. A number of these factors are beyond the Group’s control. As a result, the Group’s actual financial position, results, financial and non-financial metrics or performance measures or its ability to meet commitments and targets may differ materially from the statements or guidance set forth in the Group’s forward-looking statements. In setting its targets and outlook for the period 2024-2026, Barclays has made certain assumptions about the macro-economic environment, including, without limitation, inflation, interest and unemployment rates, the different markets and competitive conditions in which Barclays operates, and its ability to grow certain businesses and achieve costs savings and other structural actions. Additional risks and factors that may impact the Group’s future financial condition and performance are identified in the description of material existing and emerging risks beginning on page 258 of this Annual Report. Subject to Barclays PLC’s obligations under the applicable laws and regulations of any relevant jurisdiction – including, without limitation, the UK and the US – in relation to disclosure and ongoing information, we undertake no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 141 Creating positive outcomes for our stakeholders Our Purpose Our Vision Our Values Working together for a better financial future The UK-centred leader in global finance A comprehensive and pre-eminent UK consumer, corporate, wealth and private banking franchise The leading non-US based investment bank A strong, specialist US consumer bank Respect Integrity Service Excellence Stewardship We harness the power of diversity and inclusion in our business, trust those we work with, and value everyone’s contribution. We operate with honesty, courage, transparency and fairness in all we do. We act with empathy and humility, putting the people and businesses we serve at the centre of what we do. We prize sustainability, and are passionate about leaving things better than we found them. We set high standards for what we do, championing innovation and using our energy, expertise and resources to make a positive difference. Customers and clients Colleagues Society Investors Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 142 Contents Parts 1, 2 and 3 of Barclays PLC 2023 Annual Report together comprise Barclays PLC’s annual accounts and report for the purposes of Section 423 of the Companies Act 2006. Inside Part 3 Governance Governance contents Board Governance Directors’ report Remuneration report Other Governance Risk review Risk review contents Risk management Material existing and emerging risks Principal risk management Risk performance Supervision and regulation Financial review Financial review contents Key performance indicators Consolidated summary income statement Income statement commentary Consolidated summary balance sheet Balance sheet commentary Analysis of results by business Non-IFRS performance measures Financial statements Financial statements contents Consolidated financial statements Notes to the financial statements 143 143 144 145 191 230 254 254 256 258 272 284 363 373 373 374 376 377 378 379 380 387 394 394 413 421 Inside Part 1 Strategic report Welcome to Barclays The Group at a glance Chairman’s introduction Chief Executive's review Our business model Our strategy The world in which we operate Our plan and targets Our new divisional structure 2023 divisional review About Barclays Barclays UK Barclays International: Corporate and Investment Bank Barclays International: Consumer, Cards and Payments Our stakeholders Customers and clients Colleagues Society Investors Additional disclosure Section 172(1) statement Non-financial and sustainability information statement Climate-related financial disclosures summary ESG Ratings and Benchmarks ESG-related reporting and disclosures Managing risk Viability statement Shareholder information Important information Inside Part 2 Climate and sustainability report Introduction Risks and opportunities Implementing our climate strategy Resilience of our strategy Please note that throughout the document, graphical representation of component parts may not cast due to rounding 1 1 2 4 7 10 11 12 13 14 15 16 17 19 21 23 24 27 30 34 37 38 40 44 49 50 51 54 56 58 59 60 66 72 130 Governance Our governance framework facilitates the effective management of the Group across its diverse businesses. Board Governance Directors’ report Board of Directors Group Executive Committee Our governance framework Key Board activities Board Nominations Committee report Other Governance Climate and sustainability governance 145 Managing impacts in lending and financing 149 Our supply chain 150 153 156 Human rights/Modern slavery Supporting our customers The Barclays Way Board Audit Committee report 166 Whistleblowing Board Risk Committee report Board Sustainability Committee report How we comply 174 180 183 Tax Financial crime Health and safety Other statutory and regulatory information Remuneration report 185 Managing data privacy, security and resilience 191 231 236 238 239 242 245 246 247 249 250 251 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 144 Board Governance Welcome to our 2023 Board Governance report. The report sets out the composition of our Board and explains how our Board governance framework operates, alongside the key areas of focus of our Board and Board Committees in 2023. Aim of our governance The primary aim of our governance is that it: • seeks to ensure that our decision-making is aligned to our Purpose, Values and Mindset • creates long-term sustainable value for our shareholders, having regard to the interests of all our stakeholders • is effective in providing constructive challenge, advice and support to management • provides checks and balances and drives informed, collaborative and accountable decision-making. Compliance with the Code • Our Board Governance report reflects the requirements of the 2018 UK Corporate Governance Code (the Code). • To view how we comply with the Code, please see pages 183 to 184. Certain additional information, signposted throughout this report, is available at home.barclays/corporategovernance Directors’ report Board of Directors Group Executive Committee Our governance framework Key Board activities Board Nominations Committee report Board Audit Committee report Board Risk Committee report Board Sustainability Committee report How we comply Other statutory and regulatory information Remuneration report 145 149 150 153 156 166 174 180 183 185 191 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 145 Directors’ report: Board of Directors Leading the Group, driven by our Purpose, Values and Mindset Board Committee membership Audit Committee member Nominations Committee member Remuneration Committee member Risk Committee member Sustainability Committee member Committee  Chair Nigel Higgins Group Chairman Appointed: March 2019 (Board), May 2019 (Chairman) Skills, experience and contribution: • seasoned business leader with extensive experience in, and understanding of, banking and the financial services industry • strong track record in leading and chairing organisations • significant experience in providing strategic advice to major international organisations and governments • keenly focused on culture and corporate governance. Nigel spent 36 years at Rothschild & Co. where he was most recently Deputy Chairman. Prior to that he was Chairman of the Group Executive Committee and Managing Partner of Rothschild & Co. Key current appointments: Chairman, Sadler’s Wells; Non-Executive Director, Tetra Laval Group C.S. Venkatakrishnan Skills, experience and contribution: Group Chief Executive Appointed: November 2021 Brian Gilvary Senior Independent Director (SID) Appointed: February 2020 (Board), January 2021 (SID) • highly regarded leader with significant global banking experience • extensive background in financial markets and risk management • deep understanding of the business and the areas within which the Group operates. Prior to his appointment as Group Chief Executive, Venkat served as Head of Global Markets and Co-President of Barclays Bank PLC from October 2020 and Group Chief Risk Officer from 2016 to 2020. Skills, experience and contribution: • extensive senior level experience of management, finance and strategy • deep experience of US and UK shareholder engagement • significant experience with, and understanding of, the challenges and opportunities inherent in advancing a sustainable energy future. Before joining Barclays in 2016, Venkat worked at JPMorgan Chase from 1994, holding senior roles in Asset Management, Investment Banking, and in Risk. Key current appointments: Board Member, Institute of International Finance; Advisory member to the Board, Massachusetts Institute of Technology Golub Centre for Finance and Policy; Member of the UN Environment Programme Finance Initiative Leadership Council; Chair, Corporate Partnerships Board, The Royal Marsden Cancer Charity; Member, CNBC ESG Council His other senior-level experience includes serving on the boards of various commercial and charitable organisations. Brian was Chair of The 100 Group of FTSE 100 Finance Directors, a member of the UK Treasury Financial Management Review Board and has served on various Business in the Community Leadership Teams. Key current appointments: Brian spent much of his career with BP p.l.c. in senior leadership roles, where he was most recently Chief Financial Officer. Non-Executive Chair, INEOS Energy, an INEOS group company; Non-Executive Director, Defence Board, Ministry of Defence Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 146 Directors’ report: Board of Directors (continued) Robert Berry Independent Non-Executive Director Appointed: February 2022 Skills, experience and contribution: • proven track record of management of risk exposure for a global financial institution and building a modern group- wide risk management organisation • strong record of integrating risk management with strategy • significant experience in finance, model development and trading. Robert has deep risk management expertise having had a 28-year career at Goldman Sachs, where, prior to his retirement in 2018, he held the role of Co-Deputy Chief Risk Officer. Key current appointments: Trustee, High Watch Recovery Center (incorporating President, Alina Lodge) Tim Breedon CBE Independent Non-Executive Director Appointed: November 2012 Skills, experience and contribution: • significant experience in strategic planning • extensive financial services experience • detailed knowledge of risk management and UK and EU regulation. Tim is a member of the Board and is also Chair of Barclays Bank Ireland PLC (also referred to as Barclays Europe). He had a distinguished career with Legal & General where, among other roles, he was the Group Chief Executive Officer until June 2012. Tim also served as Chair of the Association of British Insurers. Key current appointments: Chairman, Apax Global Alpha Limited; Non- Executive Director, Quilter PLC Anna Cross Group Finance Director Appointed: April 2022 Skills, experience and contribution: • extensive accounting and financial services expertise • deep understanding of banking and retail sectors • significant financial leadership experience of financial institutions. Anna is a chartered accountant and Group Finance Director with responsibility for Finance, including Tax, Treasury, Investor Relations and Strategy. Mohamed A. El-Erian Skills, experience and contribution: Independent Non-Executive Director Appointed: January 2020 • highly respected economist and investor • extensive experience in the asset management industry and multilateral institutions • deep knowledge and understanding of international economics and financial services sector. Mohamed currently serves as President of Queens' College, Cambridge University. He is Chief Economic Advisor at Allianz SE, the corporate parent of PIMCO (Pacific Investment Management Company LLC) where he formerly served as Chief Executive and Co-Chief Investment Officer. Prior to joining Barclays, Anna worked in both banking and retail and held various roles at Asda, HBOS and Lloyds Banking Group. Since joining Barclays in 2013, Anna was appointed Chief Financial Officer of Barclays Bank UK PLC in 2016, Group Financial Controller in 2019 and Deputy Group Finance Director in 2020. She joined the Group Executive Committee in February 2022, before taking up the role of Group Finance Director in April 2022. Key current appointments: Chair, The 100 Group of the FTSE Finance Directors Mohamed is a regular columnist for Bloomberg Opinion and a contributing editor at the Financial Times. He spent 15 years at the IMF where he served as Deputy Director before moving to the private sector and financial services. Key current appointments: Lead Independent Director, Under Armour Inc.; Chief Economic Adviser, Allianz SE; Chairman, Gramercy Funds Management; Senior Advisor, Investcorp Bank BSC Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 147 Directors’ report: Board of Directors (continued) Dawn Fitzpatrick Independent Non-Executive Director Appointed: September 2019 Mary Francis CBE Independent Non-Executive Director Appointed: October 2016 Sir John Kingman Independent Non-Executive Director Appointed: June 2023 Marc Moses Independent Non-Executive Director Appointed: January 2023 Her previous experience includes 25 years with UBS, most recently as Head of Investments for UBS Asset Management. Key current appointments: Chief Executive Officer and Chief Investment Officer, Soros Fund Management LLC; Member, Advisory Board and Investment Committee of the Open Society Foundations’ Economic Justice Programme; Advisory Council Member, The Bretton Woods Committee; Chair, Financial Sector Advisory Council, Federal Reserve Bank of Dallas In her executive career, Mary held senior positions with both HM Treasury and the Prime Minister's Office and served as Director General of the Association of British Insurers. Key current appointments: Senior Independent Director, PensionBee Group PLC; Member, UK Takeover Appeal Board John was also the first Chief Executive of UK Financial Investments Ltd (UKFI); and from 2010-2012, he was Global Co-Head of the Financial Institutions Group at Rothschild. From 2016-2021 John was the first Chair of UK Research & Innovations, which oversees Government science funding of c£8bn a year. Between 2020 and January 2023, he was Chair of Tesco Personal Finance plc. Key current appointments: Chair, Legal & General Group plc; Trustee & Deputy Chair of the Board of Trustees, The National Gallery He joined HSBC in 2005 where he was Group Chief Risk Officer for nine years and joined the group board as an executive director in 2014. He retired from HSBC in 2019. Key current appointments: None Skills, experience and contribution: • extensive management experience of international financial institutions • strong financial and strategic leadership experience • detailed knowledge of the markets in which the Group operates. Dawn holds the role of Chief Executive Officer and Chief Investment Officer at Soros Fund Management LLC. Skills, experience and contribution: • extensive board-level experience across a range of industries • strong focus on reputation management and promoting board governance values • detailed understanding of the interaction between public and private sectors. Mary's previous appointments include Non- Executive Directorships at the Bank of England, Alliance & Leicester, Aviva, Centrica and Swiss Re Group. Skills, experience and contribution: • deep background in financial services • strong leadership qualities and chair experience • extensive expertise providing strategic advice to Government John is Chair of Barclays Bank UK PLC. He had a long Whitehall career, where he was Second Permanent Secretary to HM Treasury and was also closely involved in the UK response to the financial crisis, handling the resolution of Northern Rock and leading negotiations with RBS, Lloyds and HBOS on their £37bn recapitalisation. Skills, experience and contribution: • strong technical finance background in accounting and audit-related matters • significant board and senior executive- level risk management experience • extensive knowledge of banking and financial services. Marc is a chartered accountant and his financial services experience extends over 43 years, initially as a trader and then in senior executive roles as an audit partner at PwC, and Chief Financial Officer of JPMorgan Europe. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 148 Directors’ report: Board of Directors (continued) Diane was previously Global Chief Infrastructure Officer of Merrill Lynch, where she was responsible for all technology and operations across retail, corporates and banking. Key current appointments: None Julia was appointed as a Non-Executive Director at Legal & General Group plc in 2011. She chaired L&G’s Audit Committee between 2013 and 2016 and was Senior Independent Director from 2016 until she stepped down from L&G in March 2021. Julia previously served as the Chair of The 100 Group of FTSE 100 Finance Directors. Key current appointments: None Prior to joining Barclays, Hannah was a Senior Associate in the London Corporate practice of Clifford Chance LLP. Diane Schueneman Skills, experience and contribution: Independent Non-Executive Director Appointed: June 2015 Julia Wilson Independent Non-Executive Director Appointed: April 2021 Hannah Ellwood Group Company Secretary Appointed: February 2023 • significant experience of managing global, cross-discipline business operations and client services in the financial services industry • strong transformational programme experience • extensive technology and information security expertise. Diane is Chair of Barclays Execution Services Limited and a member of the Board of Barclays US LLC. Skills, experience and contribution: • significant board and executive-level strategic and financial leadership experience • extensive accounting, audit and financial services expertise • strong UK regulatory experience. Julia is a chartered accountant and was the Group Finance Director of 3i Group plc, having served on its board from 2008 until she stepped down in June 2022. Prior to joining 3i she was Group Director of Corporate Finance at Cable & Wireless where she also held a number of finance-related roles. Relevant skills and experience: Hannah is an experienced lawyer and company secretary with significant experience in corporate governance, regulatory, disclosure and market conduct matters. Career: Hannah joined Barclays in September 2012 as Chief of Staff to the Investment Bank General Counsel. Having moved from the Legal function to Barclays Corporate Secretariat in 2016, she was subsequently appointed Deputy Company Secretary of Barclays PLC in 2018. In February 2023, Hannah was appointed Group Company Secretary. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Directors’ report: Group Executive Committee Barclays PLC Annual Report 2023 149 Leading the delivery of Barclays' strategy As the most senior management committee for the Group, our Group Executive Committee (ExCo) supports the Group Chief Executive in executing the Group’s strategy. C.S. Venkatakrishnan Anna Cross Paul Compton Group Chief Executive Group Finance Director Global Head of the Corporate and Investment Bank and President of BBPLC Alistair Currie Kirsty Everett Matt Hammerstein Group Chief Operating Officer and Chief Executive, BX Group Chief Compliance Officer Chief Executive Officer, Barclays UK Vim Maru Tristram Roberts Taalib Shaah Global Head of Consumer Banking and Payments Group Human Resources Director Group Chief Risk Officer Stephen Shapiro Sasha Wiggins Group General Counsel Group Head of Public Policy and Corporate Responsibility Changes in ExCo during 2023 • Alistair Currie was appointed Group Chief Operating Officer and Chief Executive of Barclays Execution Services Limited (BX), having previously served on ExCo as Global Head of Consumer Banking and Payments • Kirsty Everett joined as Group Chief Compliance Officer • Vim Maru joined as Global Head of Consumer Banking and Payments We are grateful for the contributions made by the ExCo members who stepped down in 2023: • Mark Ashton-Rigby stepped down as Group Chief Operating Officer and Chief Executive of BX • Matt Fitzwater stepped down as Interim Group Chief Compliance Officer Standing attendees The Group Chief Executive extends invites to a number of standing attendees to ExCo: • Craig Bright, Chief Information Officer • Adeel Khan and Stephen Dainton, Co- Heads of Global Markets • Cathal Deasy and Taylor Wright, Co- Heads of Investment Banking ExCo meetings are also attended on a regular basis by the Group Chief Internal Auditor, Lindsay O’Reilly. Ex-officio posts ExCo continues to utilise ex-officio positions on the Committee to broaden the scope of perspectives and contributions made, as well as to provide specialist input. During 2023, the following attended ExCo meetings as an ex-officio member, with each appointee serving for a four-month rotation: • Ingrid Hengster, CEO Barclays Germany and Global Chair, Investment Bank • Antoinette O'Neill, Chief Information Officer, Corporate and Investment Bank (CIB) • Betty Gee, Americas Head of Equities Distribution within the CIB Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Directors’ report: Our governance framework Barclays PLC Annual Report 2023 150 A Group-wide governance framework facilitating effective decision-making Driving long-term sustainable value for our shareholders, with regard to the interests of our stakeholders. Group structure Barclays PLC (BPLC) is the Group’s parent company and has a premium listing on the London Stock Exchange. Each of the Group’s key operating entities - Barclays Bank PLC (BBPLC), Barclays Bank UK PLC (BBUKPLC), Barclays Europe, Barclays US LLC and Barclays Bank Delaware - has its own board (with Executive and Non- Executive Directors) and board committees. These main operating companies are supported by our Group-wide service company, BX, which provides technology, operations and functional services to businesses across the Group. Barclays PLC BBPLC Barclays Europe Barclays US LLC Barclays Bank Delaware BBUKPLC BX Our governance framework The Board recognises that effective governance is key to the successful development and execution of the Group’s strategy. We think of governance as how the Board makes decisions and provides oversight to promote Barclays’ success for the long-term sustainable benefit of our shareholders, having regard to the interests of our stakeholders (including our clients, customers, colleagues and the society and wider environment in which we operate). Our Group-wide governance framework is constructed to: • facilitate the effective management of the Group by our Group Chief Executive and his ExCo across our diverse businesses • support and provide oversight and constructive challenge of the Group’s major subsidiary boards in the UK, Ireland and the US, consistent with the legal, regulatory and independence requirements applicable to those entities. Generally, there is one set of rules for the Group. Group-wide frameworks, policies and standards are adopted throughout the Group unless local laws or regulations (for example, the ring-fencing obligations applicable to BBUKPLC) require otherwise, or ExCo deems that it would otherwise be appropriate in a specific instance. Corporate Governance Operating Manual Our Corporate Governance Operating Manual outlines how the Group’s significant subsidiaries (and their respective boards and board committees) should interact with each other. It also provides guidance and clarity for management and Directors as to how these relationships and processes should work in practice. This is a dynamic document that evolves with the changing nature of the Group. The role of the Board The BPLC Board sets the Purpose, strategic direction and risk appetite for the Group and is the ultimate decision-making body for matters of Group-wide strategic, financial, regulatory or reputational significance. We partially consolidated and streamlined the membership of the BPLC and BBPLC Boards in 2019, to improve efficiency and co-ordination while reducing complexity and unnecessary duplication. As a result, membership of the BBPLC Board is a subset of the BPLC Board. All members of the BPLC Board (except the Senior Independent Director, Chair of BBUKPLC and at least one other Non- Executive Director) also serve on the Board of BBPLC. We believe that having members of the BPLC Board serving as the Chairs of some of the Group’s main subsidiaries supports improved efficiency, escalation and co- ordination while ensuring an appropriate focus is given to matters relevant to each entity. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 151 Directors’ report: Our governance framework (continued) Board governance framework Barclays PLC Board Responsible for the overall leadership of the Group (with direct oversight of matters relating to strategy, reputation and culture) Board Nominations Committee Reviews the composition of the appointments to the Board, Board Committees and ExCo. Board Audit Committee Board Risk Committee Reviews financial reports and monitors the internal control environment. Monitors financial, operational and legal risk appetite. Board Sustainability Committee Oversees climate and sustainability matters. Board Remuneration Committee Sets principles and parameters of remuneration policy. + For more information, see page 156. + For more information, see page 166. + For more information, see page 174. + For more information, see page 180. + For more information, see page 191. Matters reserved to the Board Matters reserved solely for the decision- making power of the Board are set out in our bespoke Matters Reserved to the Board. Those matters include material decisions relating to: • strategy • risk appetite • medium term plans • capital and liquidity plans • risk management and controls frameworks • approval of financial statements • approval of large transactions • approval of share allotments, dividends and share buybacks. Responsibility for the Group’s business on a day-to-day basis has been delegated by the Board to the Group Chief Executive, supported by his ExCo, to make and implement operational decisions. Information provided to the Board The Group Chairman is responsible for setting the Board’s agenda, primarily focused on strategy, performance, value creation, culture, stakeholders and accountability. The Chairman also ensures that Board members receive timely and high-quality information to enable them to make sound decisions and promote the success of BPLC. The Group Company Secretary, working in collaboration with the Group Chairman, is responsible for ensuring good governance and information flow, to support the Board’s effectiveness. In 2023, we continued to strive for balanced papers which clearly identify substantive issues and key points for the Board’s attention, continuing the momentum created in previous years. The Board is kept informed of key business developments throughout the year through regular updates from the Executive Directors and senior management, in addition to the presentations delivered to the Board and the Board Committees as part of formal meetings. + Details of key Board activities for 2023 are set out on pages 153 to 155. Directors are able to seek independent and professional advice at Barclays’ expense, where required, to enable them to fulfil their obligations to the Board. Attendance at Board meetings Directors are expected to attend every Board meeting. Where a Director is not able to attend a Board meeting, the relevant Director’s views are made known to the Group Chairman in advance of the meeting. The Chairman also meets privately, on a regular basis, with each Non-Executive Director. + Details of Director attendance at Board meetings in 2023 are shown on the next page. Board Committees The Board is supported in its work by its Committees - the Board Nominations Committee, Board Audit Committee, Board Risk Committee, Board Remuneration Committee and the Board Sustainability Committee - each of which has its own terms of reference clearly setting out its remit and decision-making powers. This structure enables the Board to spend a significant proportion of its time focusing on the Group’s strategy. The Board Committees are comprised solely of Non-Executive Directors, with the exception of the Board Sustainability Committee of which the Group Chief Executive is an Executive member. The Chairs of each Committee report on their Committee’s work at every scheduled Board meeting. Board effectiveness The effectiveness of the Board, its Committees and individual Directors are assessed on an annual basis. We carried out an internally facilitated effectiveness review for 2023, which was led by the SID and supported by the Group Company Secretary. In line with the requirements of the Code, we intend to conduct an externally-facilitated review of the Board, Board Committees and individual Directors in 2024. + You can read more about the 2023 effectiveness review, and progress against recommendations from the 2022 review, in the Board Nominations Committee report on page 164. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 152 Directors’ report: Our governance framework (continued) Division of responsibilities Roles on the Board and attendance at Board meetings In line with the provisions of the Code, a clear division of responsibilities has been established between Executive and Non-Executive Directors. Our Charter of Expectations sets out the individual role profiles and required behaviours and competencies for the Chair, Senior Independent Director, Non-Executive Directors, Executive Directors and Committee Chairs. The table below shows the role profiles for our Board members, along with details of their attendance at Board meetings in 2023. The aggregate attendance for Board and relevant Board Committee meetings in 2023 did not fall below 75% for any Director. Meetings attended/ eligible to attend1 Ad hoc meetings attended/ eligible to attend2 Responsibilities 7/7 1/1 The Chair is responsible for: • leading the Board and its overall effectiveness in directing the Company • promoting a culture of openness and inclusion, and facilitating and encouraging open constructive challenge and debate between all Directors • ensuring the Board has a clear understanding of shareholder views. 7/7 1/1 The Group Chief Executive, supported by his ExCo, leads the Executive Directors in: • • running the Group’s business on a day-to-day basis and making and implementing operational decisions leading Barclays towards the achievement of its strategic objectives and implementing the strategy decisions taken by the Board • promoting and demonstrating the appropriate culture, values and behaviours of the boardroom, including Barclays’ Values and Mindset. 7/7 1/1 The Group Finance Director is responsible for: • together with the Group Chief Executive, the achievement of financial targets for the Group • providing strategic and functional leadership of the Finance functions • managing and responding to feedback on Barclays' business performance from investors, financial institutions, regulators and auditors. 7/7 1/1 The SID is responsible for: • providing a sounding board for the Chair; serving as a trusted intermediary for the other Directors and shareholders when necessary • maintaining contact with major shareholders to understand their issues and concerns, and ensures the Board is aware of their views • leading the appraisal of the Chair’s performance, at least annually. Non-Executive Directors are responsible for: • providing effective oversight, strategic guidance and constructive challenge • helping to develop proposals on strategy and empowering the Executive Directors to implement the Group’s strategy while scrutinising and holding to account the performance of management and Executive Directors against agreed performance objectives • with the support of the Board Nominations Committee, the appointment and removal and succession planning for Executive Directors. Notes: 1 Each Board meeting is held over the course of two days. In the 2022 Annual Report, these were reported as two separate Board meetings. For the 2023 attendance figures, one Board meeting which was held over two days has been reported as one Board meeting. 2 The ad hoc meeting was called at short notice. 3 As required by the Code, the Group Chairman was independent on appointment. 4 Sir John Kingman was appointed to the Board with effect from 1 June 2023. 5 Marc Moses was appointed to the Board with effect from 23 January 2023. 6 Julia Wilson was unable to attend due to a prior commitment. 7 Mike Ashley stepped down from the Board with effect from 3 May 2023. 8 Crawford Gillies stepped down from the Board with effect from 31 May 2023. 7/7 7/7 7/7 1/1 1/1 1/1 7/7 Notes 1/1 7/7 5/5 7/7 7/7 7/7 2/2 2/2 1/1 1/1 1/1 1/1 6 0/1 0/0 0/0 Role on Board Chair 3 Nigel Higgins Group Chief Executive C.S. Venkatakrishnan Group Finance Director Anna Cross Senior Independent Director (SID) Brian Gilvary Non-Executive Directors Robert Berry Tim Breedon Mohamed A. El-Erian Dawn Fitzpatrick Mary Francis 4 Sir John Kingman 5 Marc Moses Diane Schueneman Julia Wilson Former Directors 7 Mike Ashley 8 Crawford Gillies + You can find a copy of our Charter of Expectations, which sets out the role profiles and required competencies for our Board members, at: home.barclays/who-we-are/our-governance/board-responsibilities Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 153 Directors’ report: Key Board activities Key Board activities in 2023 Keenly focused on strategy to drive the long-term success of Barclays. Throughout 2023, the Board devoted significant attention to Barclays’ strategy, working closely with the Group Chief Executive and his ExCo both to drive forward the implementation of the Group’s strategy as set by the Board and to challenge itself on Barclays' strategic ambitions. Against a backdrop of geopolitical tensions, together with high interest rates and inflationary pressures, the Board remained focused on driving sustainable long-term value for the benefit of all of our stakeholders. You can read about how the Board has taken into account stakeholder interests in our Section 172(1) statement in the Strategic report from page 38. Within the overarching consideration of Group strategy matters, the Board continued to give significant consideration to our climate and sustainability strategy. Given the importance of the work to address the climate challenge, the Board approved the establishment of the Board Sustainability Committee in March 2023. The Board Sustainability Committee supports the Board's oversight of the Group's climate strategy and sustainability agenda, including our ambition to be a net zero bank by 2050. Please see the Board Sustainability Committee report on page 180 for further detail. You can read more about the key areas of Board focus in 2023 in the rest of this section. Spotlight Board engagement with colleagues The Board strongly believes in the importance of engaging with our stakeholders and hearing their views, which brings valuable outside perspectives to the Board. In particular, the Board recognises that our colleagues are critical to our success. Ensuring that Board members have an opportunity to engage directly with colleagues is an important part of our method of workforce engagement and helps the Board take the issues of interest to our colleagues into account in its decision-making. During 2023, Board engagement with colleagues included: • The Group Chairman and Mary Francis visited our contact centre in Wavertree, Liverpool, to experience the Consumer Duty 'in action', meeting with customer-facing colleagues and learning about how Barclays is addressing vulnerable customer needs. • The Group Chief Executive and Group Finance Director hosted quarterly all-colleague town halls on Barclays' financial performance. • Robert Berry and Sir John Kingman visited Barclays branches in London where they met colleagues. • The Group Chief Executive hosted the Citizenship and Diversity Awards to celebrate colleagues who have made a positive impact in their communities and have helped to strengthen the diversity, equity and inclusion (DEI) culture within Barclays. • Julia Wilson participated in a celebration event to congratulate newly promoted Managing Directors from across the Group. • The Group Chairman, along with other Board members, visited the new trading floors at our head office in London, meeting colleagues in the Markets business and experiencing the trading floors first-hand. • Board members spent time with Barclays UK colleagues based in the UK and India. • The Group Finance Director met colleagues during visits to our New York, Glasgow and Northampton Campuses, and hosted other colleague events including an event to mark International Women's Day. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 154 Directors’ report: Key Board activities (continued) Key focus areas Stakeholder groups The following two pages highlight the key areas of focus for the Board during 2023 and the key stakeholder groups central to the matters considered and decisions taken. Strategy, including Climate Customers and clients Society Colleagues Investors + You can read more about how Barclays engages with stakeholders in the Strategic report from page 23. Topic Strategy and business review Climate and sustainability Board activity • Held regular corporate and business strategy discussions at meetings throughout the year, including a Strategy day in September. • Reviewed and discussed the 2023 Medium Term Plan ahead of its approval by the Board in early 2024. • Received business and function reviews throughout the year to understand key risks and opportunities, including in relation to the Investment Bank, Consumer, Cards and Payments and Barclays UK. • Participated in focus sessions on 'horizontal topics' to deepen the Board's understanding on key areas of impact/focus across the Group, such as resilience and cybersecurity, reputation risk, and financial crime. • Received and discussed updates on the Group's climate and sustainability strategy, including in relation to our sustainable finance strategy, energy transition and client transition plans. • Reviewed climate and sustainability metrics and progress against targets. • Received updates on sustainability matters, including nature, deforestation and biodiversity. Key decisions ü Endorsed the announcement in October 2023 as part of our Q3 Interim results of an Investor Update to be held on 20 February 2024. ü Approved the establishment of the Board Sustainability Committee. ü Approved new restrictions on oil and gas financing. ü Approved targets for three additional sectors – Aviation, Agriculture and Commercial Real Estate. Culture, colleague and DEI Topic Culture and colleague engagement DEI Board activity • Received updates on Group culture and colleague engagement, including by way of the 'Your View' survey results. • Received regular updates from the Group Chief Executive on the Group-wide cultural change programme aimed at ensuring we deliver to a consistently excellent standard. • Considered Barclays' workforce engagement mechanisms to ensure they remain effective in delivering meaningful, regular two-way dialogue with colleagues. Key decisions ü Confirmed that Barclays' method of workforce engagement has been effective in 2023. ü Confirmed that Barclays’ workforce policies and practices are consistent with Barclays’ Values and support Barclays’ long-term sustainable success. + You can read more about the 'Consistently Excellent' programme in our Section 172(1) statement in the Strategic report on page 38. + For further information on Barclays' workforce engagement mechanisms, please see the Colleagues section in the Strategic report on page 42. • Received an update on Barclays’ DEI ambitions and the actions required to achieve those ambitions, with a focus on progress against our Gender Ambition. ü Requested future reviews/deep dives with respect to other aspects of diversity (in addition to Gender). ü Adopted a revised Board Diversity and Inclusion Policy in • Received updates on external developments in the DEI early 2024. space, including the PRA and FCA consultations aimed at improving diversity and inclusion in the financial sector. Details of the Board Diversity and Inclusion Policy can be found in the Board Nominations Committee report on page 158. + Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 155 Directors’ report: Key Board activities (continued) Finance Topic Financial reporting Board activity • Through regular updates from the Group Finance Director, assessed the financial performance of the Group and business divisions and received investor feedback following publication of the Group's financial results. Key decisions ü Approved the Group’s Annual Report and Accounts for the year ended 31 December 2022. ü Approved Q1 2023, HY 2023 and Q3 2023 financial results announcements. Capital position and distributions • Considered the Group’s capital position and distributions policy. ü Approved a full year dividend for the year ended 31 December 2022 of 5.0p per ordinary share and a share buyback of up to £500m. ü Approved a half year dividend for the period ended 30 June 2023 of 2.7p per ordinary share and a share buyback of up to £750m. Risk, including resilience Topic Risk framework Board activity • Considered the Group's risk profile and emerging risk themes, particularly in the context of macroeconomic factors such as inflationary pressures and high interest rates, as well as geopolitical matters. Key decisions ü Approved an update to the Enterprise Risk Management Framework relating to the framework and governance for compliance with laws, rules and regulations. Resilience and cybersecurity • Considered the Group Resilience Self-Assessment and management actions to increase resilience. Resolution and recovery • Received a briefing from the Group Chief Security Officer on cybersecurity risk and controls and the outcome of an independent external assessment of Barclays' cybersecurity and resilience maturity and position compared to industry peers. • Considered the Group Resolvability Self-Assessment ahead of its submission to the Bank of England and the Group Recovery Plan, which sets out the actions available in a severe financial stress scenario. • Received a briefing from management on the lessons learned from a resolution simulation exercise. ü Approved the Group Resilience Self-Assessment. ü Agreed that a Board simulation in relation to a cyber-related incident be conducted (to be run in 2024). ü Approved the Group Resolvability Self-Assessment. ü Approved the Group Recovery Plan. Governance and regulatory matters Topic Succession Board activity • Together with the Board Nominations Committee, considered succession planning and proposed appointments for the Board and Board Committees, having regard to the diversity targets adopted by the Board and wider Group. For further information, please refer to the Board Nominations Committee report on the next page. + Key decisions ü Approved the appointments of Marc Moses and Sir John Kingman to the Board. ü Approved changes to Board Committee membership as detailed in the report of the Board Nominations Committee. ü Approved the appointment of Hannah Ellwood as the Group Company Secretary. Regulatory engagement and oversight • Invited representatives from key regulators to join meetings to hear first-hand their feedback and observations, in addition to meetings held between individual Directors (including the Group Chairman and Group Chief Executive) with regulatory stakeholders during the year. Consumer Duty • Received updates on the Group's implementation of the FCA's Consumer Duty in the lead up to the implementation deadline of 31 July 2023, and a subsequent update post-July, including in relation to embedment of the Consumer Duty. ü Approved an amendment to the Matters Reserved to the Board to provide that responsibility for overseeing the application of the Consumer Duty regime across the Group rests with the Board. + Further details on the Board's oversight of Consumer Duty are set out in our Section 172(1) statement in the Strategic report from page 38. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 156 Directors’ report: Board Nominations Committee report Effective composition and robust succession plans, with a continued focus on diversity Ensuring that we continue to have the right balance of skills, experience and diversity on the Board, Board Committees and ExCo. Introduction In 2023, the Committee continued to perform a key role in supporting the delivery of the Group’s strategy through effective oversight of Board, Board Committee and ExCo composition, robust succession planning and evaluating Board performance. Through its work, the Committee ensures that the Board has the right balance of skills, experience and diversity of background and thought to be able to provide informed and constructive challenge to management while acting fairly in the interests of our stakeholders. Committee membership and activity during 2023 The Committee is chaired by our Group Chairman, with membership composed solely of Non-Executive Directors. Committee membership and meeting attendance during the year is set out opposite, and the Committee's activities during 2023 are described in this report. In discharging its responsibilities, the Committee takes into account feedback from key stakeholders, and from Board discussions more widely. You can read more about the Board’s engagement with stakeholders within our Section 172(1) statement in the Strategic report from page 38. + The Committee’s terms of reference are available at home.barclays/who-we-are/our-governance/board- committees/ Board Nominations Committee Nigel Higgins Chair, Board Nominations Committee Committee membership and meeting attendance during 20231 Member Nigel Higgins Meetings attended/eligible to attend (including ad hoc meetings) 3/3 Mohamed A. El-Erian Brian Gilvary Diane Schueneman Julia Wilson 3/3 3/3 3/3 3/3 Note: 1 There were two scheduled meetings and one ad hoc meeting of the Committee in 2023. Changes to Board and Board Committee composition in 2023 Non-Executive Director Appointments Resignations Audit (Chair) - 31 March 2023 Board - 3 May 2023 Audit (Committee) - 3 May 2023 Risk - 3 May 2023 Board - 31 May 2023 Risk - 1 June 2023 Mike Ashley Crawford Gillies Brian Gilvary Sir John Kingman Marc Moses Julia Wilson Board - 1 June 2023 Risk - 16 June 2023 Remuneration - 16 June 2023 Board - 23 January 2023 Audit - 23 January 2023 Risk - 23 January 2023 Audit (Chair) - 1 April 2023 Remuneration - 1 July 2023 A new Board Sustainability Committee was established by the Board on 23 March 2023. The following Directors were appointed to the Committee: Nigel Higgins (Chair), Robert Berry, Dawn Fitzpatrick, Mary Francis, Brian Gilvary, C.S. Venkatakrishnan and Julia Wilson. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 157 Directors’ report: Board Nominations Committee report (continued) Board size As at 31 December 2023, the size of the Board was 13. Continuing to review the optimal size of the Board is an important part of the Committee’s medium and longer-term succession planning. As part of this, the Committee takes into account the need for the Board to be small enough to operate in an efficient and collaborative manner yet large enough to ensure an appropriate mix of skills and diversity, to support succession planning and to accommodate the additional roles and responsibilities of some of our Directors on Board Committees, and on the Boards of BBPLC, BBUKPLC, Barclays Europe, Barclays US LLC and BX. The Committee considers that the size of the Board contributes to its effectiveness. Composition Through considering the skills, experience, knowledge and diversity required for effective Board, Board Committee and ExCo composition, as well as overseeing the annual Board, Board Committee and individual Director effectiveness evaluations (outlined later in this report), the Committee regularly reviews composition and succession planning and Non-Executive Director recruitment priorities. You can find biographies for each Director, including details of the skills, experience and knowledge they bring to the Board, their Board Committee memberships and other principal appointments on pages 145 to 148. Changes to Board composition in 2023 The Committee oversaw a series of changes to Board and Board Committee composition during the course of 2023, building on the progress made in 2022. Board and Board Committee changes are set out in the table on the previous page of this report. The Board considers that these changes have enhanced the effectiveness of the Board and relevant Committees, providing valuable input and support to their work as well as bringing new and diverse perspectives to discussions. We continued to strengthen the composition of the Board with the addition of two Non-Executive Directors in 2023. Marc Moses, appointed with effect from 23 January 2023, brings to the Board a strong technical finance background and extensive knowledge of banking and financial services. Sir John Kingman has a deep background in financial services, gained from his executive and non- executive career, and joined as a Non- Executive Director with effect from 1 June 2023, upon taking up his role as Chair of BBUKPLC. Mike Ashley retired from the Board at the conclusion of our AGM on 3 May 2023 and Crawford Gillies retired shortly thereafter on 31 May 2023, each having served on the Board for around nine years. Both Mike and Crawford made a significant contribution to the Group during the course of their tenure, for which the Committee and the Board are very grateful. Board composition as at 31 December 2023 Length of tenure (Chairman and Non-Executive Directors) Industry and leadership experience² (number of Directors) (number of Directors) 0-3 years 3-6 years 6-9 years 1 9+ years International experience3 (number of Directors) UK US Rest of the World Financial services Political/Regulatory experience Current/recent Chair/CEO Accountancy/ Auditing Operations/ Technology Retail/ Marketing Notes 1 Please refer to the section entitled ‘Succession’ later in this report in relation to Tim Breedon’s tenure and continued independence. 2 Individual Directors may fall into one or more categories. 3 International experience is based on the location of the headquarters/registered office of a company. 44211378131010412Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 158 Directors’ report: Board Nominations Committee report (continued) Diversity The Committee and the Board recognise the benefits of diversity in all its forms, including in relation to gender, ethnicity, age, sexual orientation, disability and socio- economic background. Having due regard for the benefits of diversity - at Board, Board Committee and ExCo level - is a vital part of the Committee’s role in leading appointments and succession planning for these key roles. Gender and ethnic diversity reporting Disclosures in the form prescribed by the new UK Listing Rules requirements relating to gender and ethnic diversity of the Board and executive management can be found in this section. Data relating to the gender and ethnic diversity of the Board was collected by way of a questionnaire. This questionnaire asked all individual Board members to disclose their gender identity and ethnic background, on a voluntary self-reporting basis, by selecting options aligned with those in the left-hand columns of the tables to the right (and therefore included the option not to specify an answer). Barclays’ employees (including executive management, as defined in the table to the right) are asked to confirm their gender and ethnicity at the onboarding stage, on a voluntary self-reporting basis, by selecting options (which include the option not to specify an answer). Data relating to the gender and ethnic diversity of executive management (as defined) was sourced from this existing data, which is held within Barclays’ secure HR system. Board Diversity and Inclusion Policy On the recommendation of the Committee, the Board adopted a revised version of the Board Diversity and Inclusion Policy on 8 February 2024. The policy confirms the Board is supportive of the Group’s culture in which Barclays is committed to continuing to build a diverse, equitable and inclusive workplace, and that the Board recognises the benefits of a diverse, equitable and inclusive Board, reflective of the communities in which we operate, in driving effective decision-making. Gender diversity reporting as at 31 December 2023 Board members Senior positions on Board (CEO, CFO, SID and Chair) Executive management1 n Women n Men Men Women Other categories Not specified/prefer not to say n Women n Men Board members Number Percentage 8 5 62 % 38 % n Women n Men Number of senior positions on the Board (CEO, CFO, SID and Chair) Executive management1 Number Percentage 3 (75%) 1 (25%) 8 4 67% 33% 1 In accordance with the requirements of the Listing Rules and for the purposes of this table only, 'executive management' comprises the Group Executive Committee and the Group Company Secretary. Ethnic diversity reporting as at 31 December 2023 Board members Senior positions on Board (CEO, CFO, SID and Chair) Executive management1 n White British or other White (including minority-white groups) n Asian/British Asian n Other ethnic group, including Arab White British or other White (including minority-white groups) Mixed/Multiple Ethnic Groups Asian/British Asian Black/African/Caribbean/ Black British Other ethnic group, including Arab Not specified/prefer not to say n White British or other White (including minority-white groups) n Asian/British Asian n White British or other White (including minority-white groups) n Asian/British Asian Board members Number Percentage Number of senior positions on the Board (CEO, CFO, SID and Chair) Executive management1 Number Percentage 10 77% 3 (75%) 1 2 8% 1 (25%) 15% 9 3 75% 25% 1 In accordance with the requirements of the Listing Rules and for the purposes of this table only, 'executive management' comprises the Group Executive Committee and the Group Company Secretary. It confirms Barclays’ commitment to ensuring that Board appointments and succession plans are based on merit and objective criteria, recognising the benefits that diversity, in all its forms, brings to the Board, and that due regard will be also given to diversity and inclusion characteristics when considering Board Committee appointments. The policy sets out the Board’s existing gender and ethnic diversity targets detailed in the table on the following page, which are aligned with the targets recommended by the FTSE Women Leaders Review on gender diversity and the Parker Review Committee Report into Ethnic Diversity of UK Boards, which are reflected in the Listing Rules. 58134810123193Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 159 Directors’ report: Board Nominations Committee report (continued) In addition, the policy also confirms the Board's ongoing commitment to operating in a way that supports diversity, equity and inclusion, where Directors’ views are both encouraged and heard. As set out in the table within this section, at 31 December 2023, the proportion of women on the Board was 38%. While this fell short of the 40% target set out in the Listing Rules, FTSE Women Leaders Review and our Board Diversity and Inclusion Policy, the Board satisfied the target of having at least one woman in a senior Board role. As we reported in our 2022 Annual Report and as set out in our Board Diversity and Inclusion Policy (as described above), the Committee and the Board remain committed to ensuring that all Board appointments and succession plans are based on merit and objective criteria, with due regard given to diversity, and focused on meeting our gender diversity targets as set out in our Board Diversity and Inclusion Policy by 2025 while continuing to bring the very best, diverse talent we can attract to the Board. You can read more about the Board appointment process and succession planning in the sections that follow. We also recognise and embrace the benefits of diversity at Board Committee level. As at 31 December 2023, Board Committee gender diversity was as follows: • Board Nominations Committee – 40% women • Board Audit Committee – 50% women • Board Risk Committee – 43% women • Board Sustainability Committee – 43% women • Board Remuneration Committee – 60% women Gender diversity within ExCo, ExCo direct reports and the wider workforce Group-wide, Barclays remains committed to its DEI vision and strategy, which was refreshed in 2022, and includes a series of principles and strategic priorities designed to support Barclays make progress against the six DEI agendas including its Gender Ambition, which is focused on improving gender diversity in senior leadership across Barclays. The Board received an update during the year on Barclays' DEI ambitions, including a focus on the Gender Ambition, as described in the Key Board activities section on page 153. In 2022, Barclays announced its refreshed Gender Ambition of 33% representation of women in senior leadership roles - Managing Directors and Directors - by the end of 2025, having achieved its initial target of 28% representation of women in these roles by the end of 2021. To achieve this ambition, Barclays focuses on the retention, development, progression and hiring of diverse talent at all levels. Regular reporting on progress against ambitions is shared with senior management. As at 31 December 2023, representation of women among Managing Directors and Directors was at 30%Δ globally, and Barclays is focused on continuing its efforts to identify diverse talent in the market and develop existing diverse talent within Barclays. The Committee is also mindful of the voluntary target recommended by the FTSE Women Leaders Review of 40% representation of women for ExCo and their direct reports by the end of 2025. As at 31 December 2023, representation of women among ExCo and their direct reports stood at 27%Δ, remaining level with the 2022 year end position. While this fell short of the FTSE Women Leaders Review recommendation, increasing gender diversity within both ExCo and their direct reports, to ensure a diverse pipeline for ExCo succession, remains a key priority for Barclays and the Committee. In 2023, Barclays continued to have one ex-officio position on ExCo, with each appointee serving for a four-month rotation. This initiative, first introduced in 2016, broadens the scope of perspectives and contributions made to ExCo, while also providing appointees with exposure to matters of Group-wide significance and further leadership experience. In 2023, all three holders of this position were women. There are additional initiatives and actions being taken across our businesses to further strengthen the senior leadership pipeline; these include using the ex officio position at business unit executive committees, sponsorship programmes to support individual development and working with senior recruitment partners to strengthen our external pipeline. Note Δ 2023 data subject to independent Limited Assurance under ISAE(UK)3000 and ISAE3410. Current limited assurance scope and opinion can be found within the ESG Resource Hub: home.barclays/sustainability/esg- resource-hub/reporting-and-disclosures/ + You can find details of ExCo membership, including ex-officio appointees during the course of 2023, on page 149. + You can read more about Barclays' DEI vision and strategy and gender diversity at Barclays, including data on the percentage of women in Barclays’ wider workforce, in our Diversity, Equity and Inclusion report, which will be made available on our website later in 2024. Board Diversity and Inclusion Policy - Targets Gender diversity target To ensure that by 2025: Ethnic diversity target • the proportion of women on the Board is at least 40%; and • at least one of the following senior Board positions is held by a woman: Chair, Chief Executive, Senior Independent Director or Chief Financial Officer, and that this is maintained going forward. To ensure that at least one Board member is from a minority ethnic background excluding white ethnic groups and that this is maintained going forward. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 160 Directors’ report: Board Nominations Committee report (continued) Ethnic diversity reporting as at 31 December 2023 As at 31 December 2023, 23% of the Board (three members) were from a minority ethnic background (excluding minority white ethnic groups), meeting the targets set out in the Listing Rules, the recommendations contained within the Parker Review Committee Report into the Ethnic Diversity of UK Boards and the ethnic diversity target in the Board Diversity and Inclusion Policy. Alongside the Board, the Committee continues to support the Group’s Multicultural agenda, including Barclays' Underrepresented Race and Ethnicity Ambition. Venkat, our Group Chief Executive, has made a significant contribution to Barclays’ diversity agenda. Having achieved our Race at Work ambition to double the number of Black Managing Directors globally from nine to 18 by 2022, in January 2023, we set a new ambition to increase the population of Managing Directors from underrepresented ethnicities by at least 50% by the end of 2025. You can find more information on Barclays’ continued commitment to its Multicultural agenda, including information regarding our ethnic minority percentage target for ExCo and their direct reports and data relating to ethnic diversity in Barclays' wider workforce, in our Diversity, Equity and Inclusion report, which will be available on our website later in 2024. + You can read more about Barclays' approach to DEI within the Colleagues section in the Strategic report from page 27. + You can find a copy of our Board Diversity and Inclusion Policy at home.barclays/who-we-are/ our-governance/our-framework-code-and-rules talent. Open advertising for Board positions was not used in 2023. The Committee will continue to review the Board’s recruitment priorities and give further consideration to the desired skills and experience for potential candidates, to ensure that due consideration continues to be given to strong potential candidates who would enhance the effectiveness of the Board. Non-Executive Director independence In line with the requirements of the Code, a majority of our Board comprises independent Non-Executive Directors. The independence of our Non-Executive Directors is considered by the Committee on an annual basis, having regard to the independence criteria set out in the Code. As part of this process, the Committee reviews the length of tenure of all Directors, which can affect independence, and makes any recommendations to the Board accordingly. The Committee reviewed the independence of all Non-Executive Directors serving on the Board as at 31 December 2023. The independence of those who had served on the Board for more than six years (Diane Schueneman and Mary Francis) and more than nine years (Tim Breedon) was subject to a more rigorous review. The Committee remains satisfied that the length of their tenure has no impact on their respective levels of independence or the effectiveness of their contributions. The Committee and the Board consider all of the Non-Executive Directors to be independent. For further details of the Committee’s review of the independence of Tim Breedon, please refer to the Succession section below. During 2023, Mike Ashley and Crawford Gillies stepped down from the Board. Mike and Crawford did not raise any concerns about the operation of the Board or management. Process for appointments The Committee leads the process for Board appointments, ensuring that all appointments are based on merit and objective criteria - focusing on the skills, experience and knowledge required for the Board’s effectiveness and to support the continued delivery of the Group’s strategy - while also promoting diversity of background and opinion. Appointments to the Board are made following a formal, rigorous and transparent procedure, facilitated by the Committee with the aid of external search consultancy firms, as outlined in further detail below. Non-Executive Director recruitment The Committee regularly reviews and updates a series of skills-based Non- Executive Director recruitment priorities. These priorities underpin the searches required for the Board to ensure orderly succession as Non-Executive Directors approach the end of their tenure and to ensure an optimum balance of skills and experience on the Board. The Committee considered and refreshed the priorities in 2023, in light of Non- Executive Director recruitment activity, including the appointments of Marc Moses and Sir John Kingman during 2023 and two Non-Executive Directors having stepped down from the Board in 2023 at the end of their tenure. The Committee has agreed that all Board members should have the opportunity to meet leading candidates, and that diversity should remain a priority in all searches. Based on the agreed priorities, the Committee has set rigorous criteria for the roles it is seeking to fill, both in terms of experience and personal qualities. Independent search firms Spencer Stuart and Egon Zehnder supported our targeted external mapping and search processes for additional Non-Executive Directors to complement the range of skills on the Board in 2023, based on the agreed criteria. Diversity of background and experience remain at the forefront of those searches. Spencer Stuart and Egon Zehnder do not have any connection to Barclays or any of the Directors other than to assist with searches for executive and non-executive Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 161 Directors’ report: Board Nominations Committee report (continued) Director appointments and reappointments Board and executive appointments process In 2023, the Committee reviewed and endorsed a refresh of the process for Board and Board Committee memberships, appointments and removals, and management appointments and removals. Searches for potential candidates have due regard to the clear benefits of diversity and are co-ordinated across the Group’s significant subsidiaries where appropriate. We aim to ensure that all Board members have the opportunity to meet leading candidates where possible. Our standard practice is to appoint any new Non-Executive Director or Chair to the Board for an initial three-year term, subject to annual re-election at the AGM (as outlined below). This may be extended for a further term of up to three years. As such, our Non-Executive Directors typically serve up to a minimum of six years, although this period may be extended where considered appropriate by the Committee. All Directors are subject to appointment or reappointment (as appropriate) each year by shareholders at the AGM. Director term Director appointment and reappointment at the AGM Time commitment All new Directors are asked to disclose their other significant commitments, which are then taken into account by the Committee when considering any proposed appointment to ensure that Directors can discharge their responsibilities to Barclays effectively. Expected time commitments are agreed with each Non-Executive Director on an individual basis, and include time to understand the business and complete training as well as time to attend and prepare for formal Board and Board Committee meetings. In considering whether a Director has sufficient time to commit to their role, the Committee has regard to regulatory and Code requirements, as well as key investor and proxy advisor guidelines. Details of the external executive and non-executive directorships held within listed companies for each of the Directors are set out in the table on this page. You can find details of other principal appointments for each Director in the Board of Directors section from page 145. The Committee reviewed the existing commitments disclosed by each of Marc Moses and Sir John Kingman ahead of their respective appointments to the Board, and was comfortable that these would not impact their ability to devote such time as is necessary to discharge their duties to Barclays effectively. Before accepting any significant new commitment outside of Barclays, all Directors must seek approval from the Board (providing an indication of expected time commitment). Prior to approving any significant new external commitment for a Director, the Board reviews all relevant facts and circumstances (including the expected role and time commitment, as well as the nature of the external organisation). Barclays PLC Board – Listed company external directorships1 As at 31 December 2023 Director Nigel Higgins C.S. Venkatakrishnan Anna Cross Robert Berry Tim Breedon Mohamed A. El-Erian Dawn Fitzpatrick Mary Francis Brian Gilvary Sir John Kingman Marc Moses Diane Schueneman Julia Wilson Notes Executive Non-Executive Non-Executive Chair Total 2 1 3 1 2 1 4 1 2 1 None None None None 2 1 None 1 None 1 None None None 1 For the purposes of this table, 'listed company' means companies whose shares are listed and traded on a regulated stock exchange, excluding appointments within the Barclays Group, and directorships held with the same group or within undertakings (including non-financial entities) in which the relevant firm holds a qualifying holding. 2 UK public listed company. 3 US public listed company. 4 UK listed closed-ended investment company. All Directors are expected to commit additional time as necessary to their work on the Board, where circumstances require. For the year ended 31 December 2023 and as at the date of publication, the Board is satisfied that none of the Directors is over-committed and that each of the Directors allocates sufficient time to their role in order to discharge their responsibilities effectively. A record of each Director’s time commitments is maintained. Conflicts of interest The Board has the authority to authorise Director conflicts of interest, in accordance with the Companies Act 2006 and BPLC’s articles of association. This ensures that the influence of third parties does not compromise the independent judgement of the Board. Directors are required to declare any potential or actual conflicts of interest that could interfere with their ability to act in the best interests of the Group. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 162 Directors’ report: Board Nominations Committee report (continued) A conflicts register recording actual and potential conflicts of interest, together with any Board authorisations of conflicts, is maintained. Authorisations are for an indefinite period but are reviewed on an bi- annual basis by the Board. The Board also considers the effectiveness of the conflicts authorisation process. The Board retains the power to vary or terminate conflicts authorisations at any time. The Group Company Secretary consults the Group Chairman when designing each bespoke induction schedule, taking into account the particular needs of the new Director. When a Director is joining a Board Committee, their induction schedule will also include an induction to the operation of that Committee. An overview of training and development delivered to the Board during 2023 is described in the table below. Director training and development The Committee supports the Group Chairman in developing and monitoring effective induction, training and development for the Board in accordance with its Terms of Reference (available at home.barclays/who-we-are/our- governance/board-committees ). Directors are provided with the opportunity to take part in ongoing training and development, but can also request specific training, as required. All Directors receive a comprehensive induction tailored to their individual requirements on appointment, designed to provide them with an understanding of the operation of the Group and its strategy and key business areas and functions. Training, development and updates for the Board in 2023 Topic Description Areas covered included Business and function reviews 'Horizontal topics' Updates from key business areas and Group functions, to deepen and broaden the Board’s understanding of the Group’s businesses, including key risks and opportunities. Compliance, Internal Audit, Barclays UK, Barclays Europe, Markets, Legal, Transaction Banking, UK Corporate, Private Bank and Wealth Management, Investment Bank, BX and HR. Focus sessions to deepen the Board's understanding on key areas of impact/focus across the Group. Resilience and Cybersecurity, Consumer Duty, Conduct, Corporate Strategy, Barclays UK Complaints, Strategic Policy, Regulatory and Financial Crime. Public Policy and Corporate Responsibility Regular updates on Public Policy and Corporate Responsibility matters. Reputation risk matters (for which the Board has direct oversight) and a broad range of topics including regulatory engagement and oversight, and climate and sustainability matters. Annual briefing on regulatory responsibilities. Senior Managers Regime and Barclays’ conduct and financial crime policies and standards. Regulatory responsibilities Corporate governance Regular updates on developments in corporate governance matters. External speakers External input to the Board. Board engagement with stakeholders Various events enabling the Board to engage directly with stakeholders. New Director inductions Tailored Non-Executive Director inductions for Marc Moses and Sir John Kingman, following their respective appointments as Non-Executive Directors. DEI matters, legal and regulatory developments, cybersecurity disclosure obligations, Directors' duties and the Economic Crime and Corporate Transparency Act 2023. External briefing to the Board Sustainability Committee on policy and regulatory developments relating to biodiversity and nature. + You can read more about the Board’s engagement with stakeholders (including colleagues) within our Section 172(1) statement in the Strategic report from page 38 and the Key Board activities section on page 153. Sessions covering the Group’s strategy and culture, stakeholder landscape and relationships, Board and Board Committee structure and other governance matters. Meetings with various senior executives from across the business including from Finance, Treasury, BX and Operations, BBUKPLC, CIB, Consumer Banking and Payments, Risk, Compliance, Public Policy and Corporate Responsibility, Regulatory Relations, HR, Internal Audit, Legal and the Group’s external auditor. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 163 Directors’ report: Board Nominations Committee report (continued) Committee-specific induction sessions Committee-specific induction sessions for Marc Moses and Sir John Kingman. Handover in accordance with requirements of the Senior Managers Regime (SMR) Formal SMR handovers from Mike Ashley (as outgoing Board Audit Committee Chair) to Julia Wilson (as incoming Board Audit Committee Chair), and from Crawford Gillies (as outgoing BBUKPLC Chair and BBUKPLC Board Nominations Committee Chair) to Sir John Kingman (as incoming BBUKPLC Chair and BBUKPLC Board Nominations Committee Chair) . Sessions providing an introduction to the relevant Board Committee, including meetings with relevant executives and briefings on topics relevant to the work of that Committee. Series of handover meetings between Mike Ashley and Julia Wilson, and Crawford Gillies and Sir John Kingman, relevant to the responsibilities being handed over (including, for Julia, the role of Group Whistleblowers’ Champion), as well as various meetings with senior executives as part of Julia's and John's inductions and transition to their new roles. ExCo succession The Committee approves all changes to ExCo composition prior to announcement, taking into account executive succession plans. In 2023, the Committee received updates regarding succession planning and proposed appointments for ExCo, including in relation to the review of the balance of skills and diversity on ExCo and for key successors. The Committee approved the ExCo changes in 2023, as set out on page 149, prior to implementation. + You can read more about gender diversity within ExCo and their direct reports in the Diversity section of this Board Nominations Committee report. Succession Through robust succession planning throughout the year, the Committee ensures that we will continue to strike the right balance of skills, experience, diversity and effectiveness on the Board, Committees and ExCo, as well as accounting for current and anticipated future business needs. The Committee’s vital work in this area includes both medium-term planning (orderly refreshing of the Board, Committees and ExCo) and long-term planning (looking ahead to the skills that may be required on the Board and the ExCo in the future). Committee consideration of succession As at 1 November 2023, Tim Breedon had served on the Board for 11 years. In early 2024, the Committee undertook a rigorous assessment of Tim’s continued independence, as it had done in the two previous years. Following careful consideration, the Committee concluded that it remained appropriate for Tim to continue to serve on the Board beyond his 11-year tenure. In reaching this conclusion, the Committee recognises the significant value that Tim continues to bring to Board discussions, particularly given his breadth of financial services sector experience and deep knowledge of risk and regulatory issues. Both the Committee and the Board continue to believe that it is advantageous for Group-wide decision-making to have the Chairs of the Group’s significant subsidiaries sit on the BPLC Board, considering that this provides connectivity with the Group's significant subsidiaries, bringing with it important insight into Board discussions. With these factors in mind, and in light of Tim’s ongoing role as Chair of Barclays Europe, the Group’s principal European subsidiary, the Committee and the Board consider it is appropriate for Tim to continue as an independent Non- Executive Director on the BPLC Board in the near-term. Given the Board's preference for the Chairs of the Group's significant subsidiaries to also be represented on the Board, in light of Tim's tenure, the Committee is giving due consideration to potential successors for his roles on the Board and as Chair of Barclays Europe. Diane Schueneman will have been on the Board for nine years in June 2024, and the Committee is also giving due consideration to potential successors for her roles on the BPLC Board and as Chair of BX. Tenure The Committee and the Board consider that length of tenure is only one of the factors to be considered with respect to Director independence, and accordingly, that tenure alone should not result in a loss of independence. The Committee and the Board are confident that Tim remains independent and continues to provide effective challenge, advice and support to management on business performance and decision-making. Having undertaken a rigorous review of Tim’s performance as a Non-Executive Director and taking into account other relevant factors that might be considered likely to impair, or could appear to impair, his independence including as set out in Provision 10 of the Code, the Committee and the Board consider Tim to be independent. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 164 Directors’ report: Board Nominations Committee report (continued) Evaluation Board, Committee and individual Director evaluation process The Committee ensures that a formal and rigorous review of the performance of the Board, Board Committees and individual Directors is undertaken each year, in line with the requirements of the Code. The 2023 effectiveness review was conducted internally, as permitted by the Code, following the process illustrated in the diagram on the right. The reviews concluded that the Board, Board Committees and individual Directors continue to be effective. Progress against the 2022 Board effectiveness review As reported in last year's Annual Report, the 2022 Board effectiveness review was facilitated internally, in line with the Code. The 2024 Board effectiveness review is expected to be externally facilitated, in line with Code requirements that the Board effectiveness review be conducted by an external facilitator at least every three years. Board Nominations Committee approval of approach to evaluation for 2023 Board evaluation Committee evaluation Individual Director evaluation Interviews held by SID with Board members Findings discussed with Group Chairman and Board Nominations Committee Board discussion and agreed action plan for 2024 Questionnaires completed by Committee members and senior management Findings discussed with Committees Agreed action plan for 2024 Group Chairman held meeting with each Director SID held meeting with the Group Chairman Confirmation of each Director’s continuing effectiveness Recommendations arising out of the 2022 Board effectiveness review, together with actions taken during the course of the year to address them, are shown in the table below. Recommendations from the 2022 evaluation Actions taken during the year Areas Discussion of key areas of focus Board agendas In the context of what is understandably a structured meeting agenda, Board members would welcome the opportunity for more unstructured discussion of key areas of focus for the Board - whether in regard to particular matters on the agenda or other macro or external developments since the previous meeting. Introduction of standing Board agenda item for open discussion of major current topics with Board members. Consideration should continue to be given to the structure of Board agendas to ensure that time allocations are appropriate. The format of certain standing Board agenda items continued to evolve, with positive Board feedback received on changes made. Board materials Continued focus on ensuring balanced papers which clearly identify substantive points and key issues for the Board’s attention. Additional time allocated on the Board agenda for discussion of material items. The Group Chairman and Group Chief Executive continued to work with management to ensure that substantive points and key issues for discussion by the Board were as clear and concise as possible within papers presented to the Board. Committee reporting to Board Engagement with senior executives Continued focus on Committee reporting to the Board, to ensure the Board has the right level of visibility on key areas of focus. Inclusion of written reports of certain Committee meetings within Board papers, in addition to thematic, forward-looking reports. Continue to identify opportunities for more informal engagement between the Non-Executive Directors and senior executives outside the boardroom. More informal engagement included engagement with management on Board papers, Board and Committee dinners with relevant senior executives, Board support for certain client events and Board engagement with colleagues as described in the Key Board activities section. External perspectives included the external briefing provided to the Board Sustainability Committee on policy and regulatory developments in relation to biodiversity and nature. Outside perspectives Continue to identify opportunities to bring external perspectives into the Board. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 165 Directors’ report: Board Nominations Committee report (continued) Individual Director effectiveness All Directors in office at the end of 2023 were subject to an individual effectiveness review. The Group Chairman considered each Director’s individual contribution to the Board as well as any feedback received as part of the broader Board and Board Committee effectiveness reviews. Based on these reviews, the Board accepted the view of the Committee that each Director to be proposed for election or re-election at the 2024 AGM continues to be effective and contributes to Barclays’ long-term sustainable success. All of the current Directors of the Company intend to submit themselves for election or re-election at the 2024 AGM and will be unanimously recommended by the Board for election or re-election as appropriate. 2023 Board effectiveness review Feedback provided by interviewees as part of the 2023 Board effectiveness review provides important insight into the Board’s performance, including areas in which the Board could be more effective. Following consideration of the findings of the 2023 Board effectiveness review, the Committee remains satisfied that the Board is operating effectively. Feedback from 2023 review Feedback from this review indicated that the Board is operating well and effectively, with Board members commenting favourably on the culture of the Board, where members feel able to share their different perspectives and views. Board members emphasised how this culture is supported by the inclusive style of the Group Chairman and his values-driven approach. The review indicated that Board composition is considered to be a strength, bringing together a range of diverse and complementary backgrounds, including deep financial services expertise. The interaction between the Board and the Board Committees was commented upon favourably, with regular reporting ensuring the Board has good visibility on key areas of focus. The review highlighted the positive relationship between the Board and management, and an appropriate level of support and challenge. Recommendations from 2023 review The 2023 review outlined the following key recommendations: • consider how Board agendas might be structured to (i) allow for deeper discussion of business performance; and (ii) create more flexibility for discussion of key topics and reflections within the agenda • identify opportunities for more open and wide-ranging discussions on big picture issues • continue to focus on ensuring balanced papers which clearly identify substantive points and key issues for the Board’s attention • continue to identify opportunities to bring external perspectives into the Board. 2023 Board Committee effectiveness review The Board Committee reviews are an important part of the way Barclays monitors and improves Committee performance and effectiveness, maximising strengths and highlighting areas for further development. The results of the 2023 Board Nominations Committee effectiveness review are reported below, and the results of the reviews of the effectiveness of the other Board Committees are reported within their individual reports elsewhere in this Board Governance report. Following consideration of the findings of the 2023 Board Committee effectiveness reviews, the Committee remains satisfied that each of the Board Committees are operating effectively. Review of Board Nominations Committee effectiveness The results of the 2023 review confirm the Committee is operating effectively. It is considered well constituted and chaired, providing high-quality oversight and constructive challenge to management in the areas within its remit. The review highlights that the Committee is considered to have the right level of skills and experience. Feedback indicates that the allocation of time between agenda items in Committee meetings is appropriate, with sufficient time for discussion and challenge, and focus on the right areas. The Committee’s interaction with the Board, Board Committees and senior management is considered effective, noting that sufficient time is allocated at Board meetings for the Chair to report to the Board on the work of the Committee. Feedback indicated that concurrent meetings of the BPLC and BBPLC Board Nominations Committee continue to be effective, with coverage of BBPLC matters within concurrent meetings considered appropriate. Interaction with the BBUKPLC Board Nominations Committee was also considered effective, confirming that the Committee continues to exercise sufficient oversight of issues relevant to the Committee’s remit relating to BBUKPLC. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Directors’ report: Board Audit Committee report Barclays PLC Annual Report 2023 166 Focused on a robust internal control environment Overseeing the integrity of our financial disclosures and the effectiveness of the internal control environment. Dear Fellow Shareholders I was appointed as Chair of the Committee in April 2023 and so this is my first report of the Board Audit Committee as Committee Chair. I would like to extend my thanks to my predecessor, Mike Ashley, for his careful stewardship of the Committee and diligence in handing it over to me. We also welcomed Marc Moses to the Committee on 23 January 2023, bringing his strong technical finance background with a deep knowledge of banking and financial services. During the year, the Committee has had a significant focus on management’s initiatives to drive sustainable improvements in the Group’s internal control environment. Specifically, the Committee received regular updates on the internal control environment from the business heads, Group Chief Internal Auditor, Group Chief Controls Officer and KPMG, identifying any thematic trends which may be arising across the Group and encouraging management to take a pro- active approach in identifying areas for enhancement. The Committee also maintained close oversight of an internal programme established by the Group Chief Executive at the end of 2022, and led by the Group Chief Operating Officer, to improve senior oversight of the more material regulatory remediation programmes with a view to enhancing controls in order to achieve a consistently excellent operating environment across the Group. This programme operates in parallel with the broader cultural change programme led by our Group Chief Executive, which you can read more about in the Section 172(1) statement in the Strategic report. The Committee recognises that maintaining a robust system of internal control is a continuous journey and there will always be programmes in train to ensure that ongoing improvements are made. As part of this, the Committee has been receiving reports on an internal programme to enhance the system Board Audit Committee Julia Wilson Chair, Board Audit Committee Committee membership and meeting attendance in 20231 Member Meetings attended/eligible to attend Julia Wilson Robert Berry 2 Marc Moses Diane Schueneman 3 Mike Ashley 12/12 12/12 12/12 8/12 6/6 Notes 1 There were 12 scheduled meetings of the Committee in 2023. Owing to prior commitments, Diane Schueneman was unable to attend four meetings (with both sets of meetings in February and October being held in short succession). Committee membership in 2023 2 Appointed with effect from 23 January 2023. 3 Retired with effect from 3 May 2023. of risk management and internal control for compliance with laws, rules and regulations. Financial crime controls also continue to be an area of significant focus for the Group and the Committee is closely following management’s progress in this area to ensure that the control framework is robust. Previous reports of the Committee also highlighted significant work by management on control remediation and enhancement programmes in relation to trading controls. While that work remains ongoing, the Committee was pleased to see significant progress made during 2023, with key remediation programmes in those areas scheduled to achieve significant milestones or complete during 2024. To decide whether any control issues required specific disclosure in this Annual Report, the Committee continued to apply similar concepts to those used for assessing internal control over financial reporting for the purposes of the US Sarbanes-Oxley Act (SOx). The Committee is satisfied that there are no control issues which are considered to be a material weakness and which merit specific disclosure. In overseeing the integrity of our financial disclosures, the Committee was mindful that the macroeconomic environment during the year remained challenging with continuing high interest rates, inflationary pressures and geopolitical uncertainty. The Committee received regular updates from the Group Finance Director and Group Chief Accounting Officer, focusing on key areas including credit impairment and coverage, provisions, valuations and tax. The Committee will continue to closely monitor management’s judgements in these areas and their disclosure. The Committee works closely with the Board Risk Committee and Board Sustainability Committee, ensuring a streamlined view of matters of relevance across the Committees. The Committee welcomed enhanced reporting by management with the incorporation of operational risk dashboards to provide a more holistic view across the controls and risk space. This is expected to support the effective and efficient consideration by the Board Audit Committee and Board Risk Committee of matters relevant to both committees. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 167 Directors’ report: Board Audit Committee report (continued) Committee effectiveness Looking ahead Management has made some significant progress on remediation during the course of 2023; maintaining that momentum in 2024 will be a key focus of the Committee. Finally, after some five years in the role, and having made significant progress in the operation and methodologies used by BIA, Lindsay O’Reilly will be stepping down as Group Chief Internal Auditor during 2024. The Committee will be looking to approve the appointment of a new Group Chief Internal Auditor in the coming months and would like to extend its thanks to Lindsay for her invaluable support, which is continuing through this transition period. Julia Wilson Chair, Board Audit Committee 19 February 2024 The results of the Committee effectiveness review for 2023 confirm the Committee is operating effectively. It is considered well constituted and chaired, providing an effective and appropriate level of challenge and oversight of the areas within its remit. Feedback recognised the effective transition of the Chair in April 2023. The review highlights that the Committee is considered to have the right level of skills and experience, including recent and relevant financial experience, and is of an appropriate size. Feedback indicates that the Committee is considered to operate at the right level of debate, and confirms that the allocation of time between agenda items in Committee meetings is appropriate, with sufficient time for discussion and challenge. The Committee’s interaction with the Board, Board Committees and senior management is considered effective, noting that sufficient time is allocated at Board meetings for the Chair to report to the Board on the work of the Committee. Feedback indicated that concurrent meetings of the BPLC and BBPLC Board Audit Committee continue to be effective, with coverage of BBPLC matters within concurrent meetings considered appropriate. Interaction with the BBUKPLC Board Audit Committee was also considered effective, confirming that the Committee continues to exercise sufficient oversight of issues relevant to the Committee’s remit relating to BBUKPLC. Please see the report of the Board Nominations Committee for details on the process for conducting the 2023 Committee effectiveness review. With respect to climate matters, the Committee received input from the Board Sustainability Committee on our external climate and sustainability narrative disclosures. Best practice and regulation regarding climate and sustainability reporting and related assurance are still evolving, while investor and other stakeholder appetite for information continues to grow, and this is an area to which the Committee will continue to have close regard. Barclays’ climate strategy remains a key focus of the Group and the Committee continues to monitor that the impact of climate change has been addressed in preparing the Group’s financial statements. The independent assurance and challenge provided by both Barclays Internal Audit (BIA) and KPMG as statutory auditor are critical to the Committee’s oversight role in relation to internal controls and financial reporting. For this reason, the Committee continues to hold regular separate private sessions with each of the Group Chief Internal Auditor and the lead KPMG audit engagement partner without management present. The Committee has oversight of Barclays’ whistleblowing programme and I took over the role of Group Whistleblowers' Champion upon my appointment as Committee Chair. During 2023, I met with the FCA and also held regular meetings with the Whistleblowing team to understand their key areas of focus and the Committee continues to receive detailed semi-annual whistleblowing updates. Throughout the year I also held regular meetings with a number of other colleagues and stakeholders to discuss any material and emerging key issues impacting the Group (including its key subsidiaries) and of relevance to the Committee. This included regular meetings with the Chair of the BBUKPLC Board Audit Committee, the Group Finance Director, Group Chief Internal Auditor and lead KPMG audit partner. As Committee Chair, throughout the year I also engaged regularly with the Group’s key regulators, including meeting with representatives of the PRA, FCA and FRBNY. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 168 Directors’ report: Board Audit Committee report (continued) Committee composition and meetings The Committee is composed solely of independent Non-Executive Directors. Membership of the Committee is designed to provide the breadth of financial expertise and commercial acumen that the Committee needs to fulfil its responsibilities. Its members as a whole have recent and relevant experience of the banking and financial services sector, in addition to general management and commercial experience; and are financially literate. Julia Wilson, the Committee Chair, and who is the designated financial expert on the Committee for the purposes of SOx, has significant corporate finance, tax and accounting experience including serving as the Group Finance Director of 3i plc from 2008 to 2022 and as Chair of the board audit committee at Legal & General Group plc. In 2023, the Committee met 12 times, with no ad hoc meetings held during the year (2022: 14 times, including four ad hoc meetings). Attendance by members at Committee meetings is shown on page 166. Primary activities Committee meetings were attended by representatives from management, including the Group Chief Executive, Group Finance Director, Group Chief Internal Auditor, Group Chief Controls Officer, Group Chief Risk Officer, Group Chief Operating Officer, Group General Counsel and Group Chief Compliance Officer, as well as representatives from the businesses and other functions, and from BBPLC senior management reflecting the partially consolidated operation of the BPLC and BBPLC Committee meetings. The lead audit engagement partner of KPMG also attended Committee meetings. The Board, together with the Committee, is responsible for ensuring the independence and effectiveness of the internal audit function and external auditors. The appointment and removal of the Group Chief Internal Auditor is a matter reserved to the Committee, and the appointment and removal of the external auditor is a matter reserved to the Board based on the recommendation of the Committee. Neither task is delegated to management. Role of the Committee The role of the Committee is to review and monitor, among other things: • the integrity of the Group’s financial statements and related announcements • the effectiveness of the Group’s internal controls • the independence and effectiveness of the internal and external audit processes • the Group’s relationship with the external auditor • the effectiveness of the Group’s whistleblowing procedures. The Committee’s terms of reference are available at home.barclays/who- we-are/our-governance/board- committees/ The Committee discharged its responsibilities in 2023 through monitoring the effectiveness of the internal control environment and internal and external audit processes, as well as the integrity of financial statements and related announcements having regard to the current macroeconomic environment. Areas of focus Role of Committee / Key issues considered Conclusion/action taken Financial reporting Fair, balanced and understandable reporting (including Country- by- Country Reporting and Modern Slavery Statement) In light of the Board’s obligation under the Code, the Committee assesses external reporting to ensure it is fair, balanced and understandable. In addition to this Annual Report and associated year-end reports, the Committee also reviewed the Group’s half-year and quarterly results announcements and the presentations to analysts. The Committee informed these reviews through: • consideration of reports of the Group Disclosure Committee • direct questioning of management on the transparency and accuracy of disclosures • consideration of the results of management’s processes relating to financial reporting matters, including the output of the Group’s internal control assessments and the SOx s404 internal control processes. The Committee closely considered the Group's financial disclosures and provided feedback, including on areas where disclosures could be enhanced. Recognising the increasing focus on, and prominence of, ESG reporting, the Committee considered the governance and assurance framework for such disclosures. The Committee emphasised the importance of management continuing to review and enhance the processes and controls around the disclosures (particularly in relation to the underlying data) as the disclosure framework and expected use of the information evolves. Having evaluated all of the available information, the assurances by management and underlying processes used to prepare the published financial information, the Committee concluded and recommended to the Board that the 2023 Annual Report and Accounts are fair, balanced and understandable. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 169 Directors’ report: Board Audit Committee report (continued) Areas of focus Role of Committee / Key issues considered Conclusion/action taken Significant accounting judgements Conduct provisions (refer to Note 23 to the financial statements) Impairment of financial instruments (refer to Note 8 to the financial statements) Impairment of goodwill and intangibles (refer to Note 21 to the financial statements) Legal, competition and regulatory provisions (refer to Note 25 to the financial statements) Valuations (refer to Notes 13 to 17 to the financial statements) Tax (refer to Note 9 to the financial statements) Barclays makes certain assumptions and estimates, analysis of which underpins provisions made for the costs of customer redress. The Committee analyses the judgements and estimates made by management to evaluate the adequacy of the provisions, including with regards to Barclays' provisioning for legacy conduct issues. The Committee monitors management's judgements in relation to expected credit losses (ECLs), which are modelled using a range of forecast economic scenarios. They use forward-looking models which require judgements to be made over modelling assumptions, including: • • • • the determination of macroeconomic scenarios to be used the methodology for weighting of scenarios the criteria used to determine significant deterioration in credit quality the application of management adjustments to the ECL modelled output. The Committee considers management's judgement in relation to goodwill and intangibles. The carrying value of goodwill and intangible assets is assessed on the basis of discounted forecast future earnings. Given the significant component of earnings attributable to net interest income, such forecasts are particularly sensitive to the level of long-term interest rates and assumed levels of future lending. The period over which intangible assets are amortised appropriately reflects the useful economic life. Barclays is engaged in various legal, competition and regulatory matters which may give rise to provisioning based on the facts. The level of provisioning is subject to management judgement on the basis of legal advice and is, therefore, an area of focus for the Committee. Barclays exercises judgement in the valuation and disclosure of financial instruments, derivative assets and certain portfolios, particularly where quoted market prices are not available. The Committee is responsible for considering the Group's tax strategy and overseeing compliance with the Group's Tax Principles. Barclays is subject to taxation in a number of jurisdictions globally and makes judgements with regard to provisioning for tax at risk and to the recognition and measurement of deferred tax assets. The Committee reviewed and challenged management’s approach to conduct provisions throughout the year and was satisfied that management's judgement and approach resulted in an adequate and appropriate level of provision in relation to the various conduct matters. As part of its monitoring, the Committee considered regular reports from management on: • the impact of the macroeconomic environment, including high interest rates, inflationary pressures and unemployment levels • model changes and model validation, and the impact of this on the use of post-model adjustments • the refresh of macroeconomic variables and associated weighting. The Committee closely considered management’s judgement on impairment coverage levels, including the impact of increasing delinquency levels in certain areas of the portfolio. Having considered and scrutinised the reports, the Committee agreed with management’s conclusion that the impairment provision was appropriate. The Committee considered management's reports on its assessment of the Group's goodwill balances and intangibles to identify any indicators of impairment, including the methodology and controls applied to the process. The Committee was satisfied with management's determination on the indicators of impairment and quantum of the impairment amount identified. The Committee received regular reports on the status of current legal, competition and regulatory matters and considered the impact of those matters on the Group’s provision levels. It also oversaw enhancements in the reporting to the Committee on these matters. It considered management’s judgements on the level of provision to be taken and accompanying disclosures and agreed that the level of provision at the year end was appropriate. The Committee also reviewed the disclosures made in respect of legal, competition and regulatory matters, and concluded that they provided appropriate information for investors. The Committee scrutinised management's approach to valuations, including in respect of pensions and the leveraged finance portfolio. The Committee was satisfied with the accounting treatment in respect of the various matters. The Committee: • • received reports from the Global Head of Tax, including updates on the work of the Tax Management Oversight Committee reviewed the appropriateness of provisions made for uncertain tax positions and management’s approach to the tax treatment of index-linked gilts and its impact on the Group’s effective tax rate • considered the impact of the UK Government’s implementation of the OECD’s global minimum tax rules • monitored the Group’s interactions with tax authorities and the material tax risks for the Group. The Committee approved the UK Tax Strategy statement published in the Country Snapshot report and recommended the Country Snapshot to the Board for approval. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 170 Directors’ report: Board Audit Committee report (continued) Areas of focus Role of Committee / Key issues considered Conclusion/action taken Going concern and viability Going concern and long-term viability Barclays is required to assess whether it is appropriate to prepare the financial statements on a going concern basis. In accordance with the Code, Barclays must provide a statement of its viability. To support this, the Committee considers both the going concern assumption and the form and content of the Viability Statement. The Committee considered both the going concern assumption and the form and content of the Viability Statement taking into account: • • • the MTP and Working Capital Report the forecast capital, liquidity and funding profiles the results of stress tests based on internal and regulatory assumptions. The Committee recommended to the Board that the financial statements should be prepared on a going concern basis and that there were no material uncertainties that would impact the going concern statement which required disclosure. The Committee recommended the Viability Statement to the Board for approval. The Committee assesses the distributable reserves position in considering management’s proposals for distributions (dividends and share buy-backs) for the full year ended 31 December 2022 and for the half year ended 30 June 2023. Having regard to the distributable reserves available to the Company, the Committee reviewed and reported to the Board on proposals for (i) a dividend for the financial year ended 31 December 2022 of 5.0p per share along with a share buy-back of up to £500m; and (ii) a dividend for the half year ended 30 June 2023 of 2.7p per share along with a share buy-back of up to £750m. In early 2024, the Committee reviewed and reported to the Board on the distributable reserves position for the full year dividend for the year ended 31 December 2023 along with a proposed share buy-back. The Committee considers the effectiveness of the overall control environment, including the status of any significant control issues and the progress of specific remediation plans. The Committee: • considered feedback received from regulatory stakeholders on the Group’s internal control environment and management’s response • evaluated and tracked the status of the more significant control matters through regular reports from the Group Chief Controls Officer • discussed reports from heads of key businesses (including Barclays UK and BBPLC) on their control environment, together with views from the second and third lines of defence. The Committee received regular deep dive reports on the more material remediation programmes across the Group, keeping a close eye on management’s progress and delivery against key milestones, including through to closure of a programme and validation by BIA. The Committee challenged management’s approach to measuring progress and emphasised the importance of qualitative factors such as the embedment and sustainability of programmes. The Committee considers the adequacy of the Group’s arrangements to allow colleagues to raise concerns in confidence and anonymously without fear of retaliation, and the outcomes of any substantiated case. The Committee received detailed semi-annual reports on whistleblowing from management. It monitored key whistleblowing metrics, the 'speak up' culture across the Group (and key metrics underpinning this) and any potential whistleblowing trends which might emerge. The Committee also monitored the implementation of enhancements to the whistleblowing process following the external benchmarking review conducted in 2022. (refer to the Viability Statement on page 54) Distributions Distributions and return of capital to shareholders Internal controls Internal controls and business control environment (read more about Barclays' internal control and risk management processes on page 184) Whistleblowing Raising concerns Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 171 Directors’ report: Board Audit Committee report (continued) Areas of focus Role of Committee / Key issues considered Conclusion/action taken Internal audit Internal audit The Committee monitors and assesses the performance of BIA and delivery of the internal audit plan, including scope of work performed, the level of resources, and the methodology and coverage of the internal audit plan. External audit External audit The Committee monitors the work and performance of KPMG. Through regular reports from BIA, the Committee: • • • • reviewed and agreed internal audit plans, methodology and deliverables for 2023, including consideration of how regulatory priorities and required regulatory coverage has been reflected in the plan reviewed BIA's audit reports in relation to specific audits, key areas of focus and themes tracked the levels of adverse audits and issues raised by BIA and monitored related remediation plans received regular updates on BIA colleague matters, including colleague engagement and resourcing • discussed BIA's assessment of the control environment and management control approach in Group companies and functions. The Committee noted the independence of the BIA function, and through reviewing BIA's quality assurance updates was pleased to see the reports demonstrating the independence of BIA’s quality assurance function. The Committee considered and was comfortable with the approach by BIA to embed the UK Consumer Duty into the BIA framework. The Committee conducted a performance assessment of BIA for 2023 and concluded it was satisfied with BIA's performance against its objectives agreed with the Committee Chair at the beginning of the year. At the end of the year, the Committee approved the 2024 audit plan, detailing the number of audits to be undertaken and the focus areas. It also approved BIA's Audit Charter following the annual review. The Committee: • met with key members of the KPMG audit team to discuss the 2023 audit plan and KPMG’s areas of focus • approved the 2023 audit plan and the main areas of focus for the year • assessed regular reports from KPMG on the progress of the 2023 audit and any material accounting and control issues identified • discussed KPMG’s draft reports on control areas of focus and the control environment ahead of the 2023 year end • approved the terms of the audit engagement letter and associated fees for 2023, on behalf of the Board. The Committee sought KPMG's views on a number of specific matters, including management's approach to critical accounting judgements and estimates, and sought to understand where KPMG had challenged management's assessment prior to reaching a conclusion. This included considering KPMG challenge in relation to key controls matters and the approach to disclosures in the Group's full year, half-year and interim financial results. The Committee considered KPMG’s response to the PRA Written Auditor Reporting for 2022, and discussed with KPMG the questions in scope for the 2023 Written Auditor Reporting. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 172 Directors’ report: Board Audit Committee report (continued) External auditor Following an external audit tender in 2015, KPMG was appointed as Barclays’ statutory auditor with effect from the 2017 financial year. Stuart Crisp, Barclays’ lead audit engagement partner, has been in the role since 2022 and attends all meetings of the Committee. Assessing external auditor effectiveness, objectivity and independence and non-audit services The Committee is responsible for assessing the effectiveness, objectivity and independence of the Group’s statutory auditor. This responsibility was discharged by the Committee throughout the year at formal meetings, during private meetings with KPMG and through discussions with key Group executives. In particular, the Committee assessed KPMG’s effectiveness, objectivity and independence in the following ways: Throughout the year • Met with senior members of the KPMG audit team from the UK, Ireland and US to discuss the approach to the 2023 audit. • Reviewed regular reports from management on the non- audit services provided by KPMG to Barclays. • Reviewed regular reports from management detailing any employees or workers hired from KPMG. • Discussed with KPMG their consideration of internal controls over financial reporting. • Considered areas in which KPMG had challenged management’s assumptions in areas of key judgement. • Assessed any potential threats to independence that were self-identified and reported by KPMG, all of which were regarded by the Committee as being adequately addressed. Annual assessment, audit quality and external findings • The Group undertakes an annual formal assessment of KPMG’s performance, independence and objectivity. The assessment for 2023 was conducted in early 2024, by way of a questionnaire completed by key stakeholders across the Group who have regular interaction with KPMG. The questionnaire was designed to evaluate KPMG’s audit process, its effectiveness and overall output. • Consistent with previous years, in 2023 KPMG nominated a senior partner of the audit team to have specific responsibility for ensuring audit quality. The Committee received reports from him during the year on his assessment of audit quality. • The findings of the FRC’s Audit Quality Report on KPMG published in July 2023, including its inspection of the Barclays audit for the year ended 31 December 2021, provided further comfort to the Committee on the quality and effectiveness of KPMG’s audit, acknowledging that there remains areas for improvement. Outcome Taking into account the result of all of the above, the Committee considered that KPMG maintained its independence and objectivity, exercised robust challenge and demonstrated professional scepticism in the audit process. The Committee was therefore satisfied that the audit process was effective. Non-audit services In order to safeguard the auditor’s independence and objectivity, Barclays has in place the Group Policy on the Provision of Services by the Group Statutory Auditor (the Policy) setting out the circumstances in which the auditor may be engaged to provide non-audit services. The Policy applies to all Barclays subsidiaries and other material entities over which Barclays has significant influence. The core principle of the Policy is that non-audit services (other than those legally required to be carried out by the Group’s auditor) should be performed by the auditor only in certain controlled circumstances. A summary of the Policy can be found at home.barclays/ who-we-are/our-governance/auditor- independence/ The Policy sets out the type of services that the auditor is permitted to carry out and pre-approves certain of these services provided the fee is below a certain threshold, except for specific categories of permitted services that require explicit Committee approval. All other permitted services must be approved in advance by the Committee. The Policy requires that all proposed work must be sponsored by a senior executive who is not involved in any work to which the proposed engagement relates. The audit assignment partner must also confirm that the engagement has been approved in accordance with the auditor’s own internal ethical standards and does not pose any threat to the auditor’s independence or objectivity. The Policy is reviewed by the Committee on an annual basis to ensure that it is fit for purpose and that it reflects applicable rules and guidelines. The Policy is aligned with both the FRC’s requirements and KPMG’s own internal policy on non-audit services for FTSE 350 companies, which broadly restricts non-audit work to services that are ‘closely related’ to the audit. In early 2023, KPMG advised the Committee that, following on from an event notified to the Committee in late 2022, a further instance had been identified of a KPMG member firm having provided services in connection with the preparation of local statutory accounts of a small overseas subsidiary not in scope for the Group audit. KPMG assured the Committee, having made appropriate enquiries of their member firms providing services to the Group, that these were isolated instances. In these circumstances, the Committee agreed with KPMG’s assessment that this had not impaired their integrity or objectivity. In view of the events notified by KPMG, the Committee reviewed the Policy in early 2023 to determine whether any revisions were required to ensure such events did not arise again. While it was determined that the Policy provided sufficiently clear guidance in terms of prohibited non-audit service work, certain enhancements were made to the Policy to further support the operation of the Policy including by specifying examples of the type of work prohibited under each headline service. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 173 Directors’ report: Board Audit Committee report (continued) The Statutory Audit Services for Large Companies Market Investigation (Mandatory Use of Competitive Tender Processes and Audit Committee Responsibilities) Order 2014 An external audit tender was conducted in 2015 and the decision was made to appoint KPMG as Barclays’ external auditor with effect from the 2017 financial year. Barclays is in compliance with the requirements of The Statutory Audit Services for Large Companies Market Investigation (Mandatory Use of Competitive Tender Processes and Audit Committee Responsibilities) Order 2014, which relates to the frequency and governance of tenders for the appointment of the external auditor and the setting of a policy on the provision of non-audit services. As explained in previous Committee reports, provided that KPMG continues to maintain its independence and objectivity, and the Committee remains satisfied with its performance, the Board does not intend to tender for an alternative external auditor to be appointed before the end of the current required period of 10 years. Accordingly, any tender is expected to be in respect of the 2027 financial year onwards and is likely to take place in 2025. The Committee has reconfirmed that it would not be appropriate to tender before this date. The Committee observed that there has been significant rotation of the senior members of the audit team since 2017 and more recent changes in certain members of the Barclays senior finance team, both of which have reduced any potential familiarisation threat. The fees payable to KPMG for the year ended 31 December 2023 amounted to £78m (2022: £71m), of which £14m (2022: £13m) was payable in respect of non-audit services. A breakdown of the fees payable to the auditor for statutory audit and non- audit work can be found in Note 39 of the financial statements. Of the £14m of non- audit services provided by KPMG during 2023, the significant categories of engagement, i.e. services where the fees amounted to more than £500,000, included: • audit-related services: services in connection with CASS (Client Assets Sourcebook) audits • other services in connection with regulatory, compliance and internal control reports and specific audit procedures, required by law or regulation to be provided by the statutory auditor • other attestation and assurance services, such as ongoing attestation and assurance services for treasury and capital markets transactions to meet regulatory requirements, including regular reporting obligations and verification reports. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Directors’ report: Board Risk Committee report Barclays PLC Annual Report 2023 174 Providing considered risk oversight through challenging times Proactive risk management in a dynamic risk environment. Dear Fellow Shareholders During 2023, the Committee focused on the financial and operational challenges arising from ongoing macroeconomic uncertainty and geopolitical tensions, overseeing management’s proactive approach to positioning the Group appropriately for the uncertain environment. The macroeconomic outlook was defined by central bank efforts to contain inflation through higher interest rates, balanced against the desire to protect economic growth and employment. As the year came to a close, market participants remained focused on the expected turn of the rates cycle and the implications for asset prices and the credit cycle. The Committee remained watchful of these events and other risks, such as the potential for disorderly market corrections and economic slowdowns across the globe; alongside wider geopolitical tensions and their impact on Barclays’ portfolios and businesses. Throughout the year the Committee heard from and challenged senior business leaders, in addition to second line risk and compliance colleagues, about how they consider and manage risks as they execute their business strategies, including any mitigating actions being taken. 2023 was undoubtedly a challenging year for the banking sector with significant market volatility, particularly in the first half of the year, coupled with the collapse of a number of US regional banks and the takeover of a distressed global bank. In addition to overseeing Barclays’ management of its liquidity and capital positions, the Committee reviewed management’s learnings from these events to help ensure that Barclays remains resilient through periods of stress. Board Risk Committee Robert Berry Chair, Board Risk Committee Committee membership and meeting attendance in 20231 Notes 1 There were nine scheduled meetings and two ad hoc meetings of the Committee in 2023. Owing to prior commitments and ad hoc meetings being called at short notice, Mohamed A. El-Erian was unable to Notes attend two scheduled meetings, Diane Schueneman was unable to attend one scheduled meeting and one ad hoc meeting and Brian Gilvary was unable to attend one ad hoc meeting. Alongside financial risks, the Committee oversaw management’s work to drive robust operational risk management across Barclays; in this regard, the Committee considered the risks of cyber- related attacks and their potential impact on customers and clients, and heard from management about ongoing work to strengthen the bank’s cybersecurity defences. In addition, the Committee monitored work in Barclays UK designed to reduce risk by improving the control environment and drive efficiencies. The Committee tracked Barclays' progress towards ensuring it can recover its most important business services in the event of material service disruption within tolerance by the regulatory deadline of March 2025. Meetings attended/eligible to attend (including ad hoc meetings) Member Robert Berry 11/11 9/11 11/11 5/5 11/11 9/11 11/11 4/4 4/5 Mohamed A. El-Erian Dawn Fitzpatrick 2 Sir John Kingman 3 Marc Moses Diane Schueneman Julia Wilson 4 Mike Ashley 5 Brian Gilvary Committee membership in 2023 2 Appointed with effect from 16 June 2023. 3 Appointed with effect from 23 January 2023. 4 Retired with effect from 3 May 2023. 5 Retired with effect from 1 June 2023. Financial crime risk across the financial services sector has grown as a result of the increasing sophistication of bad-actors. In recognition of the growing risks, the Committee closely monitored management’s work to identify and mitigate financial crime risk across the Group, in line with increased regulatory expectations. Conduct risk remains a key area of oversight. The Committee oversaw management’s preparations for the implementation of the Financial Conduct Authority’s (FCA) ‘Consumer Duty' in July 2023, and continues to monitor management's efforts to ensure good outcomes for retail customers. During the year, the Committee reviewed changes to the Group’s Enterprise Risk Management Framework (ERMF), to underpin work to strengthen how the Group manages the risks of non- compliance with laws, rules and regulations (LRR). As part of this a new LRR risk was established alongside conduct risk under a new Principal Risk called Compliance risk. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 175 Directors’ report: Board Risk Committee report (continued) Looking ahead The Committee actively encourages management to be alert to areas of emerging risk, particularly in light of the rapidly evolving macroeconomic, geopolitical and technological environments. As we move into 2024, geopolitical tensions, macroeconomic uncertainty and inflationary pressures are expected to continue, with further uncertainty on the horizon in light of the upcoming election cycles in many of our key markets, including the US and UK. The Committee will continue to work with management to anticipate, stress test and prepare for periods of volatility to prevent outsized or unexpected losses materialising and to manage emerging risks as they arise. Robert Berry Chair, Board Risk Committee 19 February 2024 The Committee continued to oversee how climate change is driving financial and operational risks, the materiality of their impact and how Barclays is managing them through the Climate Principal Risk Framework. The Committee received updates on the Bank’s ongoing advancements to its climate risk management approach, including the development of a risk appetite, monitored through a range of quantitative metrics. The Committee also heard from senior business leaders about how climate risks are being integrated into their business strategies and plans. The Committee approved the results of the 2023 internal climate stress test (CST) and considered lessons learned that will enable Barclays to better assess specific climate vulnerabilities as well as the impact that climate factors can have on the financial stresses used to calibrate overall risk appetite. The Committee will continue to maintain close oversight of the annual CST as it is further integrated into the Group’s planning and stress testing framework. As part of its work overseeing climate risk, the Committee worked closely with the Board Audit Committee and Board Sustainability Committee, ensuring a streamlined view of matters of relevance across the Committees. The Group uses models and data to support a broad range of business decisions and risk management activities across the Group. This is an area impacted by rapid technological change and increasing regulatory scrutiny and the Committee continued to focus on the Bank’s approach to managing the associated risks, including its approach to developing and validating models, and monitoring of their performance through a volatile macro environment. The volume of regulatory change across the global financial services industry is significant. The Committee heard from management about the impact of these changes for Barclays and the work necessary to ensure compliance. This is an area to which the Committee expects to devote attention in 2024 and beyond. By way of a final word, in 2023, the Committee oversaw a change to the senior management of the Compliance function, with the appointment of a new Group Chief Compliance Officer, Kirsty Everett, who took up the role in July 2023. In 2023 we also welcomed both Marc Moses and Sir John Kingman (Chair of Barclays UK) to the Committee, both of whom bring with them a deep knowledge of financial services. Committee effectiveness The results of the Committee effectiveness review for 2023 confirm the Committee is operating effectively; it is considered well constituted and chaired, providing an effective and appropriate level of challenge and oversight of the areas within its remit. Feedback noted members’ wide and diverse skills and experience, recognising that recent additions to Committee composition had been positive in providing the Committee with a deeper retail perspective. Feedback indicates that the Committee is considered to operate at the right level of debate. It also confirms that the allocation of time between agenda items in meetings is appropriate, with sufficient time for discussion and challenge. The Committee’s interaction with the Board, Board Committees and senior management is also considered effective, noting that sufficient time is allocated at Board meetings for the Chair to report to the Board on the work of the Committee. Feedback indicated that concurrent meetings of the BPLC and BBPLC Board Risk Committee continue to be effective, with coverage of BBPLC matters within concurrent meetings considered appropriate. Interaction with the BBUKPLC Board Risk Committee was also considered effective, confirming that the Committee continues to exercise appropriate oversight of issues relevant to the Committee’s remit relating to BBUKPLC. Please see the report of the Board Nominations Committee for further details on the process for conducting the 2023 Committee effectiveness review. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 176 Directors’ report: Board Risk Committee report (continued) Committee roles and responsibilities The Committee is responsible for reviewing, on behalf of the Board, management’s recommendations on the Principal Risks as set out in the ERMF (with the exception of reputation risk, which is a matter reserved to the Board), and in particular: • reviewing, on behalf of the Board, the management of those Principal Risks in the ERMF • considering and recommending to the Board the Group’s risk appetite and tolerances for those Principal Risks • reviewing, on behalf of the Board, the Group’s risk profile for those Principal Risks • commissioning, receiving and considering reports on key risk issues • safeguarding the independence, and overseeing the performance, of Barclays’ Risk and Compliance functions. The Committee’s terms of reference are available at home.barclays/who-we-are/our- governance/board-committees/ Committee meetings In 2023, the Committee met 11 times (including two ad hoc meetings) and the attendance by members at these meetings is shown on page 174. In addition to its members, Committee meetings were attended by representatives from senior management, including the Group Chief Executive, Group Chief Risk Officer, Group Finance Director, Group Chief Internal Auditor, Group Treasurer, Group Chief Compliance Officer and Group General Counsel, as well as representatives from the businesses and additional colleagues from the Risk function. The Committee held regular private sessions with the Group Chief Risk Officer and the Group Chief Compliance Officer; these were not attended by other members of management. The lead audit engagement partner of KPMG also attended Committee meetings. Primary activities The Committee discharged its responsibilities in 2023 through reviewing and monitoring Group exposures in the context of the current and emerging risks facing the Group. The Committee seeks to promote a strong culture of disciplined risk management. Areas of focus Conclusion/action taken Key role of Committee Risk framework and governance Risk appetite and stress testing i.e. the level of risk the Group chooses to take in pursuit of its business objectives, including testing whether the Group’s financial position and risk profile provide sufficient resilience to withstand the impact of severe but plausible economic scenarios. • To review the design of the ERMF and recommend to the Board for approval any relevant changes. • To track the progress of significant risk management projects. • To consider risk management matters raised by Barclays’ regulators and monitor the actions being taken by management to respond. • To review the effectiveness of the Company's risk management systems. • The Committee reviewed an update to the ERMF to clarify roles and responsibilities of Legal, Compliance and Risk, particularly relating to the framework and governance for compliance with LRRs. The Committee recommended the updated ERMF to the Board for approval. • The Committee reviewed reports from management on guidance, letters and reviews received from regulators. The Committee examined management’s responses to the matters raised by regulators and received updates on key remediation programmes. • To propose to the Board an appropriate risk appetite and tolerance for the Principal Risks, including an overall Group risk appetite and limits. • The Committee discussed and approved the mandate and scale limits as well as the stress loss limits for the Group. Subsequent changes were reviewed and approved during the course of the year. • To review and approve the methodology used to establish the Group’s risk appetite and associated stress testing. • To discuss and agree stress loss and mandate and scale limits for credit risk, market risk, operational risk and treasury and capital risk. • To consider and approve internal stress test (IST) themes, and consider the financial constraints and scenarios, for stress testing risk appetite for the Medium Term Plan (MTP). • To consider and approve the results of stress tests required by regulatory bodies. • The Committee considered and approved stress test results, including those of the 2023 IST and reverse IST, as well as the associated risk appetite for the MTP. • The Committee reviewed and approved the results of the internal CST, and received a report on the lessons learned from the exercise. • The Committee considered feedback from the FRB on Barclays US LLC’s Comprehensive Capital Analysis and Review (CCAR) following the submission of the CCAR stress test results. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 177 Directors’ report: Board Risk Committee report (continued) Areas of focus Risk profile i.e. the impact on the Group’s risk profile of geopolitical and macroeconomic developments and conditions. Key role of Committee Conclusion/action taken • To evaluate and report to the Board on the Group’s risk profile and monitoring of the Principal Risks in the ERMF. • To consider proposed material changes to the Group’s risk profile. • The Committee received regular updates on the Group's risk profile from the Group Chief Risk Officer. • The Committee examined key risk themes in order to monitor the evolving risk environment in which Barclays operates, the response of management, and the changing risk profile of the Group. • The Committee considered macroeconomic developments, including economic slowdown across several major economies, inflationary pressures, market volatility, higher energy costs and supply chain constraints, the path of interest rates, and the associated consumer affordability stresses. • The Committee monitored the Group's exposures to geopolitical risks and considered longer-term and emerging risk themes. Credit risk and Market risk i.e. the risk of financial loss if customers, clients or counterparties fail to fully honour their obligations; or due to market movements. • To review and consider vulnerabilities to credit • The Committee considered a report from losses in the bank’s lending and banking transactions which expose the firm to credit risk. • To review and consider the risk of loss arising from potential adverse changes in the value of the firm’s assets and liabilities from fluctuation in market variables. • management following market events in relation to the distress of a number of financial institutions and takeover of a global bank and lessons learned for process and operational improvements. In light of the challenging inflationary and rates environment throughout 2023, the Committee considered updates on the impact on consumer indebtedness and Barclays consumer portfolios. Treasury and Capital risk i.e. having sufficient capital and financial resources to meet the Group’s regulatory requirements and its obligations as they fall due, to maintain its credit rating, to support growth and strategic option. • The Committee received regular updates on credit risk and market risk within the CIB, with a particular focus on the structured lending and finance and leveraged finance portfolios. • The Committee received reports on enhancements to regulatory reporting. • To review capital performance against plan, • The Committee reviewed capital and liquidity tracking the capital trajectory, any challenges and opportunities and regulatory policy developments. • To assess liquidity performance against both internal and regulatory requirements, and review any challenges and opportunities. • To monitor capital and funding requirements. • To consider the ICAAP and ILAAP scenario review. performance and the forecast capital and funding trajectory, including the actions identified by management to manage the Group's capital position, taking into account relevant macroeconomic factors. • The Committee received a preliminary assessment of the ICAAP and the ILAAP in May 2023. The Committee subsequently discussed and approved the Group's 2023 ICAAP and the Group's 2023 ILAAP prior to their submission to the PRA. • The Committee recommended to the Board for approval the Group Recovery Plan, which forms part of the Group’s capital and liquidity risk management framework. • The Committee reviewed the Resolvability Assessment Framework (RAF), along with lessons learned from a Recovery and Resolution Simulation Exercise and recommended the RAF to the Board for approval. • The Committee monitored preparations for compliance with Trading Wind Down capabilities in the context of recovery planning and post resolution restructuring. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 178 Directors’ report: Board Risk Committee report (continued) Areas of focus Climate risk i.e. the impact on financial and operational risks arising from climate change through physical risks, risks associated with transitioning to a lower- carbon economy and connected risks. Key role of Committee Conclusion/action taken • To consider and assess the impact of climate • The Committee received regular updates on climate risk on the Group’s activities. risk including areas of elevated climate risk and progress against sector targets. • The Committee considered progress and plans around integration of climate into business actions and the development of quantitative climate risk appetite and an additional climate stress as a secondary test for the MTP. • The Committee reviewed how climate change is driving financial and operational risks and how Barclays is managing them. Operational risk i.e. the risk of loss arising from inadequate or failed processes and systems, human factors or due to external events. • To review the Group’s operational risk profile and consider specific areas of operational risks, including fraud, conduct risk, operational recovery planning, cybersecurity risk, execution risk, technology and data, including the controls that are in place for managing and mitigating such risks. • The Committee received regular reporting on key operational risk indicators and was briefed by management on a number of operational risks topics, including those relating to technology risk, fraud, third party risk management, cyber and information security and the risks associated with new business activities. • To track operational risk key indicators. Model risk i.e. the potential for adverse consequences from decisions based on incorrect or misused model outputs and reports. ▪ To evaluate the appropriateness of the Model Risk Management Framework, including receiving updates on findings in relation to specific modelling processes. • The Committee oversaw and provided feedback on work to redesign the new and amended products process, including a new governance framework. • The Committee considered operational resilience, including reviewing and recommending to the Board for approval the 2023 Resilience Self-Assessment report, detailing the resilience risks which may impact Barclays’ ability to recover within impact tolerance, and to ensure plans align to enhanced expectations intended to reduce the risk of customer/client harm. • The Committee received updates on cyber resilience and reviewed the results of an external benchmarking exercise to test cybersecurity and resilience. • The Committee considered operational risks in the context of work in Barclays UK to upgrade its technology platform to improve the control environment and drive efficiencies. • The Committee reviewed and discussed regular updates on model risk, including progress in developing the Model Risk Management Framework, and in relation to the continued focus and momentum required to address increasing regulatory expectations and the development of an uncertainty framework for large models frameworks. • The Committee continued its oversight of the new independent Model Strategy and Oversight team, particularly with respect to review of and enhancements made to key models and developments and remediations. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 179 Directors’ report: Board Risk Committee report (continued) Areas of focus Compliance risk i.e. Compliance risk is comprised of (i) LRR risk and (ii) conduct risk, which is the risk of poor outcomes to customers, clients and markets, arising from the delivery of the Group's products and services. Legal risk i.e. the risk of loss or imposition of penalties, damages or fines from the failure of the firm to meet its legal obligations, including regulatory or contractual requirements. Remuneration Oversight of the Risk and Compliance functions Key role of Committee Conclusion/action taken • To receive updates from management on conduct risk and consider performance against key conduct risk indicators and the status of initiatives in place to address those risks to further strengthen the culture of the business. • To review the effectiveness of the Conduct Risk Framework. • The Committee received regular updates on conduct risk and assessments of potential risks to the Group following market events. • The Committee received updates on lessons learned reviews undertaken in response to industry developments and events, and continued to monitor ongoing remediation activities. • To oversee how Barclays mitigates the risk of non-compliance with LRR risk. • The Committee received regular updates on the management of the Group’s financial crime risk. • The Committee received briefings on the Group’s preparations for commencement of the FCA’s new Consumer Duty. • To monitor the Group’s legal risk profile, including considering potential material emerging legal risks. • The Committee received regular updates on the legal risks faced by the Group, including horizon scanning for key areas of emerging legal risk and Barclays’ ability to manage these and other risk trends. • To make a recommendation to the Board Remuneration Committee on the financial and operational risk factors to be taken into account in annual remuneration decisions. • The Committee considered the 2023 ex-ante risk adjustment methodology including input from the Group Chief Risk Officer and the Group Chief Compliance Officer. • To safeguard the independence of, and oversee • The Committee considered assessments of the the performance of, Barclays' Risk and Compliance functions. • To satisfy itself that the Barclays Compliance and Risk functions are adequately resourced, and have appropriate access to information so as to be able to perform their functions effectively. • To review the Compliance function’s Annual Compliance Plan. • To oversee the Group’s compliance and risk culture. performance of the Risk and Compliance functions. • The Committee met privately with the Chief Risk Officer and Chief Compliance Officer on a regular basis. • The Committee approved the Annual Compliance Plan. • The Committee received updates on the compliance and risk culture within the Group. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 180 Directors’ report: Board Sustainability Committee report Driving forward our net zero ambition Overseeing our climate and sustainability strategy. Dear Fellow Shareholders I am delighted to present to you the first report of the Board Sustainability Committee. In March 2020, Barclays announced its ambition to be a net zero bank by 2050, becoming one of the first banks to do so. In 2023, we continued to pursue opportunities and support our clients as they transition their businesses to a low- carbon economy. When I wrote to you ahead of our 2023 AGM, I highlighted that a key commitment for Barclays over the subsequent 12 months was to help finance this transition and in December 2022 we announced a new target to facilitate $1trn of Sustainable and Transition Financing between 2023 and 2030, and increased our investment mandate to £500m of capital to invest in early-stage climate-tech companies by the end of 2027. Today we are reporting $67.8bn financing facilitated towards the $1trn Sustainable and Transition Financing target and £138m invested since March 2020 in 21 climate-tech companies. A second key priority was to assess baseline emissions for the four remaining high-emitting sectors in our portfolio, as well as developing a high-level modelled assessment of our overall balance sheet, consistent with the approach outlined by the Partnership for Carbon Accounting Financials (PCAF). We have announced new targets for Aviation, Commercial Real Estate and Agriculture, and published our first high-level modelled assessment under PCAF. We have also published our updated Climate Change Statement which includes new restrictions on oil and gas financing. In particular, we will stop directly financing new oil and gas projects, and have set clear expectations for our energy clients to produce transition or decarbonisation plans and set near-term targets to reduce emissions. The final key priority was to refine our Client Transition Framework so as to improve our ability to work with clients in high-emitting sectors on their individual transition plans. This will allow us to measure and monitor our clients’ decarbonisation progress and assess the implications for our targets, and to offer more tailored support to clients’ transition requirements. Board Sustainability Committee Nigel Higgins Chair, Board Sustainability Committee Committee membership and meeting attendance in 20231 Member Meetings attended/eligible to attend Nigel Higgins Robert Berry Dawn Fitzpatrick Mary Francis Brian Gilvary C.S. Venkatakrishnan Julia Wilson 4/4 4/4 3/4 4/4 2/4 4/4 4/4 Having cross-membership on the Committee with the Chairs of our Board Audit, Remuneration and Risk Committees, as well as connectivity with the BBUKPLC Board, helps to ensure a streamlined approach to Board-level oversight of all climate and sustainability related matters. Committee effectiveness The results of the Committee effectiveness review for 2023 confirm the Committee is operating effectively. It is considered well constituted and chaired, providing high-quality oversight and constructive challenge to management in the areas within its remit. The review highlights that the Committee is considered to have the right level of skills and experience, including climate/ sustainability expertise, and is of an appropriate size. The review noted the benefits of having cross-membership between the Committee and the Board Risk Committee and the Board Audit Committee, and having the Group Chief Executive as a member of the Committee in the context of the development of Barclays’ climate strategy as well as the skills and experience he brings to the Committee. Note 1 There were four scheduled Committee meetings held in 2023. Owing to prior commitments, Brian Gilvary was unable to attend two meetings and Dawn Fitzpatrick was unable to attend one meeting. The Board has direct oversight of and responsibility for the Group’s climate and sustainability strategy. However, given the importance of this work and the growing importance of other sustainability areas, including nature and biodiversity, in March 2023 the Board approved the establishment of a new Board Sustainability Committee to support and advise the Board in its oversight of climate and sustainability matters. The Committee receives presentations into the challenges and opportunities in this area (including external input on specific areas of focus), undertakes detailed reviews and discussions and makes recommendations to the Board on key topics. The table on page 182 provides an overview of the Committee’s work in 2023 supporting the Board in overseeing the activities to meet our climate priorities. In addition to myself, the members of the Committee are Robert Berry, Dawn Fitzpatrick, Mary Francis, Brian Gilvary, C.S. Venkatakrishnan and Julia Wilson. Tracy Corrigan also attends Committee meetings as a non-executive representative of the BBUKPLC Board. As an Executive member of the Committee, our Group Chief Executive brings invaluable climate and sustainability insight to the Committee’s discussions, including the views of key external stakeholders. He is also a member of the UNEP FI Leadership Council and a member of the CNBC ESG Council, and through those roles he is able to bring external perspectives of key climate/sustainability matters to the Committee’s discussions. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 181 Directors’ report: Board Sustainability Committee report (continued) Feedback indicates that the Committee is considered to operate at the right level of debate, and that the allocation of time between agenda items in Committee meetings is appropriate, with sufficient time for discussion and challenge, and focus on the right matters. The review concluded that the Committee’s interaction with the Board, Board Committees and senior management is considered effective, noting that sufficient time is allocated at Board meetings for the Chair to report to the Board on the work of the Committee and to provide feedback on key sustainability policy matters in support of the Board’s continued oversight. Feedback indicated that concurrent meetings of the BPLC and BBPLC Board Sustainability Committee are effective, with coverage of BBPLC matters within concurrent meetings considered appropriate. The addition of a representative to the Committee from the BBUKPLC Board at the beginning of 2024 was considered to support ongoing BBUKPLC Board engagement in respect of sustainability matters impacting the Group. Please see the report of the Board Nominations Committee for further details on the process for conducting the 2023 Committee effectiveness review. Looking ahead Looking ahead to 2024, a key focus for the Committee will be oversight of management’s development of Barclays' transition plan, informed by the work of the UK's Transition Plan Taskforce, in conjunction with ongoing work to implement the Group’s climate strategy by supporting clients with their transition plans. A critical component of the work undertaken to addressing the climate challenge is the approach by governments with respect to climate and sustainability policy and financing. The importance of having clear requirements for the transition, and clarity and consistency in respect of government policy and financing, are key in supporting all those committed to transitioning to a low carbon economy. This is an area to which the Committee will have close regard this year. Finally, as indicated above, nature and biodiversity are areas of growing importance on the sustainability agenda. The Committee is looking forward to building on the work done in 2023 and the external briefing it received on this subject by having a greater focus on the impact of these areas, including how they can be reflected in Barclays’ own ambition to be a net zero bank. Nigel Higgins Chair, Board Sustainability Committee 19 February 2024 The role of the Board and its Committees in overseeing climate-related matters Board Sets and oversees the Group's climate and sustainability strategy Board Audit Committee Board Risk Committee Board Sustainability Committee Board Remuneration Committee “Best practice and regulation regarding climate and sustainability reporting and related assurance are still evolving … and this is an area to which the Committee will continue to have close regard.” “The Committee...heard from senior business leaders about how climate risks are being integrated into their business strategies and plans.” “In 2023, we continued to pursue opportunities and support our clients as they transition their businesses to a low-carbon economy.” "When we set the incentive pool and Executive Directors’ incentive outcomes for 2023, we incorporated consideration of progress against our climate strategy, as we will for 2024." Julia Wilson Chair Robert Berry Chair Nigel Higgins Chair Brian Gilvary Chair Considers the impact of climate on the Group’s financial statements and reviews key climate- related narrative reporting. + See the Board Audit Committee report on page 166. Oversees Barclays’ progress in its climate risk management approach, including a focus on developing quantitative risk appetites. + See the Board Risk Committee report on page 174. Supports the Board in its oversight of climate matters and the sustainability agenda. Reflects progress against climate-related measures in remuneration. + See the Board Sustainability Committee report on page 180. + See the Remuneration report on page 191. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 182 Directors’ report: Board Sustainability Committee report (continued) Committee composition and meetings During 2023, the Committee met four times and the attendance by members at these meetings is shown on page 180. Committee meetings were also attended by representatives from management, including the Group Head of Public Policy and Corporate Responsibility, the Group Head of Sustainability, the Global Head of Sustainable Finance and the Head of Legal, Public Policy and Corporate Responsibility. Role of the Committee The role of the Committee is to provide oversight of climate matters and the sustainability agenda, and in particular to: • support and advise the Board on its oversight of climate and sustainability matters relating to (i) the services and products provided to Barclays’ clients and customers, (ii) particular sectors, and (iii) its own corporate activities • support the Board in monitoring the implementation of the Group’s climate and sustainability strategy • review and make recommendations to the Board on the suitability of the Group’s climate and sustainability strategy, position statements, frameworks, ambitions, metrics, and targets • report to the Board on the climate and sustainability matters for which it is responsible, escalating issues and making recommendations to the Board where appropriate. The Committee’s terms of reference are available at home.barclays/who-we-are/ our-governance/board-committees/ Primary activities During 2023, the Committee received updates from management in relation to the Group’s climate and sustainability strategy, as well as internal and external briefings and reports on climate and sustainability matters. Set out below are the key areas of focus for the Committee's work in 2023. Areas of focus Conclusion/action taken Climate and sustainability strategy Target setting and progress against targets The Committee: • Considered management's sustainable finance strategy proposals, which focused on the actions required to accelerate support for our clients as they transition and for the Group to achieve its sustainable financing target and ambition to be a net zero bank. • Considered areas where the Group could focus, providing the greatest opportunity to support global endeavours to transition to a low carbon economy and help the Group achieve its strategic ambitions. • Reviewed proposals for the Group’s updated oil and gas policy and endorsed new restrictions on oil and gas financing. The Committee: • Considered management’s proposals for new targets and endorsed new targets for three additional sectors – Aviation, Agriculture and Commercial Real Estate. • Monitored the Group’s progress against its climate and sustainability targets. As part of this, the Committee received updates on progress towards the target to facilitate $1trn of Sustainable and Transition Financing by the end of 2030, and considered initiatives that were underway to provide further capability to achieve the target. + You can read more about Barclays’ sector targets and progress against them in the Strategic report on page 89. Investor feedback Client Transition Framework (CTF) The Committee considered investor feedback and the perspectives of both our institutional investors as well as our retail shareholder base. During the year, members of the Committee engaged with institutional investors on climate-related matters, helping inform the development of our climate strategy. The Committee received updates on the Group’s work on the CTF, including management’s approach to working with clients going through CTF assessments, expected outcomes following the assessments and proposed expansion of the application of the framework following further targets set by the Group. You can read more about the CTF in the Strategic report on page 90. + External briefing: Nature The Committee received an external briefing on policy and regulatory developments in relation to biodiversity and nature and the work done by Barclays as part of the UNEP-FI pilot on nature-related risks and opportunities assessment. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 183 Directors’ report: How we comply Reporting against the Code's principles and provisions As Barclays PLC is listed on the London Stock Exchange, the principles and provisions of the Code apply, a copy of which can be found at frc.org.uk For the year ended 31 December 2023, and as at the date of this report, we are pleased to confirm that Barclays PLC has complied in full with the requirements of the Code. This section and our Board Governance report sets out how we complied with the Code in 2023. By virtue of the information included in the Annual Report, we comply with the corporate governance statement requirements of the FCA’s Disclosure and Transparency Rules (DTRs). The information required to be disclosed pursuant to DTR 7.2.6 is located on pages 185 to 190. Information in relation to the Board Diversity and Inclusion Policy, as required to be disclosed pursuant to DTR 7.2.8A, can be found on pages 158 to 160. Barclays is permitted by NYSE rules to follow UK corporate governance practices instead of those applied in the US. Any significant variations must be explained in Barclays' Form 20-F filing, found at the Securities and Exchange Commission’s EDGAR database or on our website, home.barclays The way in which Barclays has applied the principles and provisions of the Code during 2023 is summarised below and on the next page. Board Leadership and Company Purpose Division of Responsibility Composition, Succession and Evaluation Our Board governance is designed to deliver an effective and entrepreneurial Board, which discharges its role effectively and efficiently. Details can be found on pages 150 to 152, including our Group-wide governance framework and the Board's responsibilities. Key Board activities for 2023 are set out on pages 153 to 155. The Board is fully supportive of The Barclays Way, which sets out our Purpose, Values and Mindset, and is our Code of Conduct, providing a path for achieving a dynamic and positive culture in the Group. Refer to page 245 for further detail. Our Group Whistleblowing Standard enables colleagues to raise any matters of concern anonymously and is embedded into our business. Further information can be found on page 246. Throughout 2023, we engaged with our stakeholders through a variety of means. Refer to page 23 of the Strategic report for further detail about how Barclays engages with our stakeholders. You can read about how the Board engages with stakeholders in our Section 172(1) statement in the Strategic report from page 38 and examples of the Board's engagement with colleagues during 2023 can be found on page 153. The majority of the Board comprises independent Non-Executive Directors. The Group Chairman and Group Company Secretary work in collaboration to ensure an effective and efficient Board, as further described in Our governance framework from page 150. All Directors have access to the advice of the Group Company Secretary. The roles of Chair, Group Chief Executive, SID and Non-Executive Directors are defined within the Barclays Charter of Expectations, along with the behaviours and competencies for each role, as outlined on page 152. Directors are expected to commit sufficient time to ensure they can discharge their obligations to Barclays effectively, as detailed in our Board Nominations Committee report on page 161. The Board is responsible for setting the strategy for the Group. The day-to-day management of the Group is delegated by the Board to the Group Chief Executive who is supported by his ExCo, the composition of which is outlined on page 149. Details of the number of meetings of the Board and its Committees, and the individual attendance by Directors, can be found in Our governance framework on page 152 and in each respective Board Committee report. All Board and senior management appointments are viewed through a diversity lens and are based on merit and objective criteria, which focus on the skills and experience required for the Board's effectiveness and the delivery of the Group's strategy. A revised Board Diversity and Inclusion Policy was adopted on 8 February 2024. For further detail, refer to the Board Nominations Committee report on page 158. Board appointments are made following a rigorous and transparent process facilitated by the Board Nominations Committee, with the aid of external search consultancy firms. All Directors are subject to annual re-election at the AGM. See page 185 for further detail. Each year, we carry out an effectiveness review to evaluate the performance of the Board, Board Committees and individual Directors. In line with the Code, the review was conducted internally for 2023, and is expected to be conducted externally in 2024. Refer to the Board Nominations Committee report on page 164 for details of the 2023 effectiveness review as well as progress against the findings from the 2022 review. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 184 Directors’ report: How we comply (continued) Audit, Risk and Internal Control The Board, together with the Board Audit Committee, is responsible for ensuring the integrity of this Annual Report and that the financial statements as a whole present a fair, balanced and understandable assessment of Barclays' performance, position and prospects. The Board, together with the Board Audit Committee, is responsible for ensuring the independence and effectiveness of the internal audit function and external auditors. The Directors are responsible for ensuring that management maintains an effective system of risk management and internal control and for assessing its effectiveness. Such a system is designed to identify, evaluate and manage, rather than eliminate, the risk of failure to achieve business objectives and can only provide reasonable, and not absolute, assurance against material misstatement or loss. Processes are in place for identifying, evaluating and managing the Principal Risks facing the Group. A key component of The Barclays Guide is the ERMF. The purpose of the ERMF is to identify and set minimum requirements of the main risks to the strategic objectives of the Group. The Group is committed to operating within a strong system of internal control. The Barclays Guide contains the overarching framework setting out the approach of the Group to internal governance. Key controls are assessed on a regular basis for both design and operating effectiveness. Issues arising out of these assessments, where appropriate, are reported to the Board Audit Committee. The Board Audit Committee oversees the control environment (and remediation of related issues). It also reviews annually the risk management and internal control system. The Board Audit Committee has concluded that throughout the year ended 31 December 2023 and to date, the Group has operated an effective system of internal control that provides reasonable assurance of financial and operational controls and compliance with laws and regulations. You can read more about the Board Audit Committee and its work, including its oversight of the internal control framework and areas of ongoing enhancement, from page 191. Remuneration The Remuneration report from page 191 sets out the purpose and activities of the Board Remuneration Committee, a summary of the remuneration policy for the Executive Directors and how it is aligned with the policy for the wider workforce, as well as the Directors’ remuneration outcomes for 2023. The remuneration policies and procedures support the Group's strategy and enable us to reward sustainable performance, which is a key element of our Remuneration Philosophy, in line with our Values, Mindset and risk expectations. All Executive Director and senior management remuneration policies are developed in accordance with the Group's formal and transparent procedures (ensuring that no Director is involved in deciding their own remuneration outcome) and are, where possible, aligned to wider workforce policies. Board Remuneration Committee members exercise independent judgement and discretion when determining remuneration outcomes, considering the company and individual performance, wider workforce and other relevant stakeholder considerations. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 185 Directors’ report: Other statutory and regulatory information The Directors present their report together with the audited accounts for the year ended 31 December 2023. Other statutory and regulatory information Other information that is relevant to the Directors’ report, and which is incorporated by reference into this report, can be located as follows: Remuneration policy, including details of the remuneration of each Director and Directors’ interests in shares Corporate Governance Statement Risk review Page 201, 207, 225 to 227 183 to 184 254 Disclosures required pursuant to Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 as updated by Companies (Miscellaneous Reporting) Regulations 2018 can be found on the following pages: Engagement with employees (Sch. 7, Para 11 and 11A 2008/2018 Regs) Engagement with suppliers, customers and others in a business relationship (Sch. 7, Para 11 B 2008/2018 Regs) Financial instruments (Sch. 7, para 6 2008 Regs) Hedge accounting policy (Sch. 7, para 6 2008 Regs) Disclosures required pursuant to Listing Rule 9.8.4R can be found on the following pages: Page 27 to 29 24 to 26, 30 to 33 and 238 to 244 441 441 Page 477 185 Allotment for cash of equity securities Waiver of dividends Section 414A of the Companies Act 2006 requires the Directors to present a Strategic report in the Annual Report and Financial Statements. This report can be found on pages 3 to 55. The Company has chosen, in accordance with section 414C(11) of the Companies Act 2006, and as noted in this Directors’ report, to include certain matters in its Strategic report that would otherwise be disclosed in this Directors’ report: • an indication of likely future developments may be found in the Strategic report • the particulars of important events affecting the Company since the financial year end can be found in the Strategic report and Note 25 (Legal, competition and regulatory matters) to the financial statements. Profit and dividends Statutory profit after tax for 2023 was £5,323m (2022: £5,973m). The 2023 full year dividend of 5.3p per ordinary share will be paid on 3 April 2024 to shareholders whose names are on the Register of Members at the close of business on 1 March 2024. With the 2023 half year dividend totalling 2.7p per ordinary share, paid in September 2023, the total dividend for 2023 is 8.0p (2022: 7.25p) per ordinary share. The half year and full year dividends for 2023 amounted to £1,210m (2022: £1,028m). BPLC also completed share buy-back programmes during 2023, further details of which can be found later in this section. Shareholders may have their dividends reinvested in Barclays by joining the Barclays Dividend Reinvestment Plan (DRIP). Further details regarding the DRIP can be found at home.barclays/dividends and shareview.co.uk/info/drip The nominee company of certain Employee Benefit Trusts (EBTs) holding shares in Barclays in connection with the operation of our employee share plans has lodged evergreen dividend waivers on shares held by it that have not been allocated to employees. The total amount of dividends waived during the year ended 31 December 2023 was £1.70m (2022: £6.28m). Board of Directors The names of the current Directors of BPLC, along with their biographical details, are set out on pages 145 to 148 and are incorporated into this Directors’ report by reference. Changes to Directors during the year and up to the date of this report are set out below. Name Role Marc Moses Non- Executive Director Mike Ashley Non- Crawford Gillies Sir John Kingman Executive Director Non- Executive Director Non- Executive Director Effective date Appointed 23 January 2023 Resigned 3 May 2023 Resigned 31 May 2023 Appointed 1 June 2023 Appointment and retirement of Directors The appointment and retirement of Directors is governed by our Articles, the Code, the Companies Act 2006 and related legislation. The Articles may be amended only by a special resolution of the shareholders. The Board has the power to appoint additional Directors or to fill a casual vacancy among the Directors and any Director so appointed holds office only until the next AGM and may offer themselves for re- election. The Code recommends that all directors of FTSE 350 companies should be subject to annual re-election. All Directors intend to offer themselves for election or re-election at the 2024 AGM. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 186 Directors’ report: Other statutory and regulatory information (continued) Directors’ indemnities Qualifying third party indemnity provisions (as defined by Section 234 of the Companies Act 2006) were in force during the course of the financial year ended 31 December 2023 for the benefit of the then Directors of the Company and the then Directors of certain of the Company's subsidiaries and, at the date of this report, are in force for the benefit of the Directors of the Company and the directors of certain of the Company's subsidiaries in relation to certain losses and liabilities which they may incur (or have incurred) in connection with their duties, powers or office. The Group also maintains Directors’ and Officers’ Liability Insurance which gives appropriate cover for legal action brought against its Directors. Qualifying pension scheme indemnity provisions (as defined by Section 235 of the Companies Act 2006) were in force during the course of the financial year ended 31 December 2023 for the benefit of the then Directors, and at the date of this report are in force for the benefit of directors of Barclays Pension Funds Trustees Limited as trustee of the Barclays Bank UK Retirement Fund, and Barclays Executive Schemes Trustees Limited as Trustee of Barclays Capital International Pension Scheme (No.1) and Barclays PLC Funded Unapproved Retirement Benefits Scheme. The directors of the trustees are indemnified against liability incurred in connection with the trustees’ activities in relation to the Barclays Bank UK Retirement Fund, Barclays Capital International Pension Scheme (No.1) and Barclays PLC Funded Unapproved Retirement Benefits Scheme. Political donations The Group did not give any money for political purposes in the UK or outside the UK, nor did it make any political donations to political parties or other political organisations or to any independent election candidates, nor did it incur any political expenditure during the year. In accordance with the US Federal Election Campaign Act, Barclays provides administrative support to a federal Political Action Committee (PAC) in the US, funded by the voluntary political contributions of eligible employees. The PAC is not controlled or funded by Barclays and all decisions regarding the amounts and recipients of contributions are directed by a steering committee comprising employees eligible to contribute to the PAC. Contributions to political organisations reported by the PAC during the calendar year 2023 totalled $60,159 (2022: $105,000). Country-by-Country reporting The Capital Requirements (Country-by- Country reporting) Regulations 2013 require the Company to publish additional information in respect of the year ended 31 December 2023. This information is included in the Barclays Country Snapshot available on the Barclays website: home.barclays/annualreport Support for candidates and colleagues with disabilities and long-term conditions Barclays is committed to attracting and retaining a diverse workforce, and our commitment to inclusion means we want to ensure that candidates with disabilities and long-term health conditions receive support and adjustments in the application process and beyond. Barclays welcomes applications from all candidates and is committed to ensuring reasonable adjustments (accommodations) are put in place to ensure a fair and inclusive recruitment process. Barclays is committed to providing all colleagues with the support and tools they need to have a productive and fulfilling career. We can consider making adjustments to remove or reduce barriers colleagues might face if they have a disability, health concern or mental health condition We also ensure opportunities for training, career development and promotion are available to all. Research and development In the ordinary course of business, the Group develops new products and services in each of its business divisions. Greenhouse gas emissions, energy consumption and energy efficiency action Although financed emissions account for the greatest proportion of our climate impact, we have also continued addressing our operational emissions – an important factor in meeting our ambition to be a net zero bank by 2050. Progress to date 1 In 2023 we achieved our milestone of 50% reduction of our Scope 1 and 2 location-based GHG emissions ahead of 2030 – reducing these emissions by 51%Δ. We continued to source 100% renewableΔ 2 electricity for our global real estate 3 portfolio and continued to meet our 90% Scope 1 and 2 market-based emissions 4 – reducing these reduction target emissions by 93%Δ. Key contributors to our progress include 5 global real estate portfolio right-sizing and energy efficiency programmes, as well as company vehicles electrification, and our continued focus on renewable electricity sourcing. For our Scope 3 operational emissions our focus remained on engaging with our key stakeholders and making data enhancements, particularly by acquiring primary supplier data and evolving our accounting methodology in line with industry standards and best practice. We also continued to pursue the integration of ESG considerations and expectations into processes throughout the procurement lifecycle. We expect that our progress against our net zero operations targets and milestones is likely to be variable and non- linear. Our net zero operations strategy is dependent on broader industry, technological and regulatory changes that are outside Barclays’ control and may affect our ability to achieve our targets and milestones. Further, as the accounting standards and data underlying our net zero operations strategy continue to evolve and be refined, this could impact our metrics, targets and milestones. Note Δ 2023 data subject to independent limited assurance under ISAE (UK) 3000 and ISAE 3410. Current limited assurance scope and opinion can be found within the ESG Resource Hub: home.barclays/sustainability/esg- resource-hub/reporting-and-disclosures/ Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 187 Directors’ report: Other statutory and regulatory information (continued) Notes 1 In this section, a reference to a 'milestone' denotes an indicator we are working towards and report against. 2 We maintained 100% renewable electricity sourcing for our global real estate portfolio through instruments including green tariffs (55%) and energy attribute certificates (EACs)(45%). 3 Global real estate portfolio includes offices, branches, campuses and data centres. 4 In this section, a reference to a 'target' denotes an indicator linked to our executive remuneration. 5 By right-sizing we are optimising our space and associated resources for our operational needs. Progress against our targets and milestones may also be impacted by management decisions based on key drivers unrelated to climate, for example prudent risk management practices. Our intent is to enhance data collection and accuracy to help identify key contributors to our impact, determine opportunities for improvement, and support the integration of sustainability into our business operations. These measures build on those taken during 2022 to implement our net zero operations strategy. Further information is available on page 191 of the Barclays PLC Annual Report 2022. GHG Emissions Table and Notes We have disclosed global GHG emissions and energy use data as required by the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008. See the ESG Data Centre for further details on our annual operational GHG emissions since 2018, including our Scope 1, Scope 2 (location and market based) and Scope 3 operational emissions. We further provide insights on our annual waste production, energy, water consumption and renewable electricity consumption by region. For further information about Barclays’ net zero operations strategy, see page 73 of the Barclays PLC Annual Report 2023. + The ESG Data Centre within the ESG Resource Hub can be found at home.barclays/sustainability/esg- resource-hub/reporting-and-disclosures Group Operational GHG Emissions2 (tCO2e) Total Scope 1, Scope 2 location-based, Scope 3 operational GHG emissions (000' tonnes) 3 Scope 1 CO2e emissions (000' tonnes) 4 Scope 2 location-based CO2e emissions (000' tonnes) 5 Scope 3 CO2e emissions (000' tonnes) Category 3 Fuel and Energy Related Activities CO2e emissions (000' tonnes) Category 5 Business Waste in Operations CO2e emissions (000' tonnes) Category 6 Business Travel CO2e emissions (000' tonnes) Category 8 Upstream Leased Assets CO2e emissions (000' tonnes) Category 13 Downstream Leased Assets CO2e emissions (000' tonnes) Energy consumption used to calculate operational GHG emissions (MWh) Intensity Ratio Total Full-Time Employees (FTE) 6 Total CO2e per FTE (tonnes) Market-based emissions 7 Scope 2 market-based CO2e emissions (000' tonnes) Total Scope 1 and 2 market-based CO2e emissions (000' tonnes) Notes Current Reporting Year 20231 Previous Reporting Year 2022 UK & Offshore Area Global GHG Emissions UK & Offshore Area Global GHG Emissions 91.6 9.4 35.7 46.5 12.9 0.19 15.3 18.1 0 183.5 15.3Δ 87.2Δ 81.0 13.4Δ 0.36Δ 39.5Δ 27.0Δ 0.72Δ 94.8 12.8 47.3 34.7 14.7 0.21 9.0 10.8 0 177.2 20.2 99.8 57.2 15.7 0.35 19.9 20.7 0.57 208,564 375,087Δ 285,874 463,973 45,300 2.02 0 9.4 92,900 1.97Δ 1.6Δ 16.9 44,000 2.15 0 12.8 87,400 2.03 2.0 22.1 1 The carbon reporting year for our GHG emissions is 1 October to 30 September. The carbon reporting year is not fully aligned to the financial reporting year covered by this Directors’ report. Details of our approach to assurance over the data is set out in the 2023 Barclays Strategic report. 2 The methodology used to calculate our GHG emissions follows the 'Greenhouse Gas Protocol (GHG): A Corporate Accounting and Reporting Standard (Revised Edition)', defined by the World Resources Institute/World Business Council for Sustainable Development. We have adopted the operational control approach to define our reporting boundary. For 2023, we have applied the latest emission factors as of 31 December 2023. Reported emissions for Scope 2 location and market-based have been recalculated back to the 2018 baseline, due to updated internal and external data. The associated emissions have also been re-classified from Scope 2 electricity to Scope 3 Category 8 (Upstream Leased Assets) as these emissions are currently outside of our operational control. In 2022 we reported Scope 2 location-based emissions of 103,422 tCo2e; the recalculated figure is 99,782 tCO2e. In 2022 we reported Scope 2 market-based emissions of 1,883 tCo2e; the recalculated figure is 1,963 tCO2e. In 2022 we reported energy use of 467,939 MWh; the recalculated figure is 463,973 MWh. 3 Scope 1 emissions include our direct GHG emissions from natural gas, fuel oil, company cars and HFC refrigerants. In the case of company-owned vehicles, emissions are limited to UK vehicles only as this is the only country in which expense data is available. 4 Scope 2 GHG emissions include our indirect GHG emissions from purchased electricity, purchased heat, cooling and steam . Market-based emissions have been reported for 2023 and 2022. We have used a zero emission factor where we have green tariffs or energy attribute certificates in place globally. 5 Scope 3 category 1, 2 and 4 emissions are excluded as these emissions cannot be broken down by country. Scope 3 category 1, 2 and 4 emissions can be found in the Operational Footprint tab of the ESG Data Centre. 6 Intensity ratio calculations have been calculated using location-based emission factors only. 7 Energy consumption data is captured through utility billing; meter reads or estimates. Principal measures we have undertaken in 2023 to improve energy efficiency include the following: • Right-sized our global real estate portfolio, therefore optimising our space and associated resources for our operational needs. • Deployed our global energy optimisation programme by adjusting corporate offices' settings and systems during periods of low or no occupancy to reduce our demand for energy while keeping our buildings running. In 2023 the programme contributed to approximately 9.1 GWh in energy savings at our UK sites – equivalent to the annual electricity consumption of approximately 2,600 UK households. Δ 2023 data subject to independent limited assurance under ISAE (UK) 3000 and ISAE 3410. Current and previous limited assurance scope and opinions can be found within the ESG Resource Hub for further details: home.barclays/sustainability/esg-resource-hub/reporting-and-disclosures/ Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 188 Directors’ report: Other statutory and regulatory information (continued) Share capital Share capital structure The Company has ordinary shares in issue. The Company’s Articles also allow for the issuance of sterling, US dollar, euro and yen preference shares (preference shares). No preference shares have been issued as at 16 February 2024 (the latest practicable date for inclusion in this report). Ordinary shares therefore represent 100% of the total issued share capital as at 31 December 2023 and as at 16 February 2024 (the latest practicable date for inclusion in this report). Details of the movement in ordinary share capital during the year can be found in Note 27 to the financial statements. The rights and obligations attaching to the Company's ordinary shares and preference shares are set out in the Company's Articles, copies of which are available on the Company's website at home.barclays/corporategovernance Voting Every member who is present in person or represented at any general meeting of the Company, and who is entitled to vote, has one vote on a show of hands. Every proxy present has one vote. The proxy will have one vote for, and one vote against, a resolution if he/she has been instructed to vote for, or against, the resolution by different members or in one direction by a member while another member has permitted the proxy discretion as to how to vote. On a poll, every member who is present in person or by proxy and who is entitled to vote has one vote for every share held. In the case of joint holders, only the vote of the senior holder (as determined by the order in the share register) or his/her proxy may be counted. If any sum payable remains unpaid in relation to a member’s shareholding, that member is not entitled to vote that share or exercise any other right in relation to a meeting of the Company unless the Board otherwise determines. If any member, or any other person appearing to be interested in any of the Company’s ordinary shares, is served with a notice under Section 793 of the Companies Act 2006 and does not supply the Company with the information required in the notice, then the Board, in its absolute discretion, may direct that that member shall not be entitled to attend or vote at any meeting of the Company. Person interested 2 BlackRock, Inc. Notes The Board may further direct that, if the shares of the defaulting member represent 0.25% or more of the issued shares of the relevant class, dividends or other monies payable on those shares shall be retained by the Company until the direction ceases to have effect and no transfer of those shares shall be registered (other than certain specified ‘excepted transfers’). A direction ceases to have effect seven days after the Company has received the information requested, or when the Company is notified that an excepted transfer of all of the relevant shares to a third party has occurred, or as the Board otherwise determines. Transfers Ordinary shares may be held in either certificated or uncertificated form. Certificated ordinary shares may be transferred in writing in any usual or other form approved by the Group Company Secretary and executed by or on behalf of the transferor. Transfers of uncertificated ordinary shares must be made in accordance with the Companies Act 2006 and the CREST Regulations. The Board is not bound to register a transfer of partly paid ordinary shares or fully paid shares in exceptional circumstances approved by the FCA. The Board may also decline to register an instrument of transfer of certificated ordinary shares unless (i) it is duly stamped, deposited at the prescribed place and accompanied by the share certificate(s) and such other evidence as reasonably required by the Board to evidence right to transfer, (ii) it is in respect of one class of shares only, and (iii) it is in favour of a single transferee or not more than four joint transferees (except in the case of executors or trustees of a member). The Company is not aware of any agreements between holders of securities that may result in restrictions on the transfer of securities or voting rights. Variation of rights The rights attached to any class of shares may be varied either with the consent in writing of the holders of at least 75% in nominal value of the issued shares of that class, or with the sanction of a special resolution passed at a separate meeting of the holders of the shares of that class. The rights of shares shall not (unless expressly provided by the rights attached to such shares) be deemed varied by the creation of further shares ranking equally with them or subsequent to them. Limitations on foreign shareholders There are no restrictions imposed by the Articles or (subject to the effect of any economic sanctions that may be in force from time to time) by current UK laws which relate only to non-residents of the UK and which limit the rights of such non- residents to hold or (when entitled to do so) vote the ordinary shares. Exercisability of rights under an employee share scheme EBTs operate in connection with certain of the Group’s Employee Share Plans (Plans). The trustees of the EBTs may exercise all rights attached to the shares in accordance with their fiduciary duties, other than as specifically restricted in the documents governing the Plans. The trustees of the EBTs have informed the Company that their normal policy is to abstain from voting in respect of the Barclays shares held in trust. The trustees of the Global Sharepurchase EBT and UK Sharepurchase EBT may vote in respect of Barclays shares held in the EBTs, but only as instructed by participants in those Plans in respect of their partnership shares and (when vested) matching and dividend shares. The trustees will not otherwise vote in respect of shares held in the Sharepurchase EBTs. Special rights There are no persons holding securities that carry special rights with regard to the control of the Company. Major shareholders Major shareholders do not have different voting rights from those of other shareholders. Information provided to the Company by substantial shareholders (holding voting rights of 3% or more in the financial instruments of the Company) pursuant to the DTRs are published via a Regulatory Information Service and is available on the Company’s website. As at 31 December 2023, the Company had been notified under Rule 5 of the DTRs of the following holdings of voting rights in its shares. Between 31 December 2023 and 16 February 2024 (the latest practicable date for inclusion in this report), the Company has not received any additional notifications pursuant to Rule 5 of the DTRs. Number of Barclays Shares % of total voting rights attaching to issued share capital1 Nature of holding (direct or indirect) 944,022,209 5.78 indirect 1 The percentage of voting rights detailed above was calculated at the time of the relevant disclosures made in accordance with Rule 5 of the DTRs. 2 Total shown includes 6,687,206 contracts for difference to which voting rights are attached. Part of the holding is held as American Depositary Receipts. On 25 January 2024, BlackRock, Inc. disclosed by way of a Schedule 13G filed with the SEC beneficial ownership of 1,303,920,163 ordinary shares of the Company as at 31 December 2023, representing 8.6% of that class of shares. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 189 Directors’ report: Other statutory and regulatory information (continued) Powers of Directors to issue and allot or buy back the Company’s shares The powers of the Directors are determined by the Companies Act 2006 and the Company’s Articles. The Directors are authorised to issue and allot shares and to buy back shares subject to, and on the terms of, the annual shareholder approval at the AGM. Such authorities were granted by shareholders at the 2023 AGM. It will be proposed at the 2024 AGM that the Directors be granted new authorities to issue and allot and buy back shares. Repurchase of shares On 13 March 2023 and 28 July 2023 the Company commenced share buy-back programmes to purchase its ordinary shares of £0.25p each up a maximum consideration of £500m and £750m, respectively. The first share buy-back programme concluded on 14 April 2023 and the second share buy-back programme concluded on 23 October 2023. The Company repurchased for cancellation 343,041,720 ordinary shares at a volume weighted average price of 145.7549 pence per ordinary share during the first buy-back programme and 493,603,770 ordinary shares at a volume weighted average price of 151.9437 pence per ordinary share during the second buy- back programme. The purpose of the buy- back programmes was to reduce the Company’s number of outstanding ordinary shares. In aggregate, the Company purchased 836,645,490 ordinary shares during 2023 with an aggregate nominal value of approximately £209m (this represented approximately 5.5% of the Company's issued share capital as at 31 December 2023) for an aggregate consideration of £1,250m excluding taxes and expenses. All of the repurchased ordinary shares have been cancelled. No further shares have been repurchased since the completion of the second share buy-back programme on 23 October 2023. The maximum number of ordinary shares which could be repurchased by the Company as part of any share buy-back under the authority for on-market share buy-backs granted at the 2023 AGM is 1,093,533,143 ordinary shares (being 1,587,136,913 less the 493,603,770 shares repurchased as part of the second share buy-back programme). Distributable reserves As at 31 December 2023, the distributable reserves of the Company were £21,162m (2022: £21,701m). Change of control There are no significant agreements to which the Company is a party that take effect, alter or terminate on a change of control of the Company following a takeover bid. There are no agreements between the Company and its Directors or employees providing for compensation for loss of office or employment that occurs because of a takeover bid. Controls over financial reporting A framework of disclosure controls and procedures is in place to support the approval of the financial statements of the Group. Specific governance committees are responsible for examining the financial reports and disclosures to help ensure that they have been subject to adequate verification and comply with applicable standards and legislation. Where appropriate, these committees report their conclusions to the Board Audit Committee, which debates such conclusions and provides further challenge. Finally, the Board scrutinises and approves results announcements and the Annual Report to ensure that appropriate disclosures have been made. This governance process is designed to ensure that both management and the Board are given sufficient opportunity to debate and challenge the financial statements of the Group and other significant disclosures before they are made public. Management’s report on internal control over financial reporting Management is responsible for establishing and maintaining adequate internal control over financial reporting under the supervision of the principal executive and financial officers, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements, in accordance with (a) UK-adopted international accounting standards; and (b) International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), including interpretations issued by the IFRS Interpretations Committee. Internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that, in reasonable detail: • accurately and fairly reflect transactions and dispositions of assets • provide reasonable assurances that transactions are recorded as necessary to permit preparation of financial statements in accordance with UK- adopted international accounting standards and IFRS and that receipts and expenditures are being made only in accordance with authorisations of management and the respective Directors • provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use or disposition of assets that could have a material effect on the financial statements. Internal control systems, no matter how well designed, have inherent limitations and may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that internal control over financial reporting may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate. Management has assessed internal control over financial reporting as at 31 December 2023. In making its assessment, management utilised the criteria set out in the 2013 COSO framework. Management has concluded that, based on its assessment, internal control over financial reporting was effective as at 31 December 2023. The system of internal financial and operational controls is also subject to regulatory oversight in the UK and overseas. Further information on supervision by financial services regulators is provided under Supervision and Regulation in the Risk review section on pages 363 to 372. Changes in internal control over financial reporting There have been no changes that occurred during the period covered by this report, which have materially affected or are reasonably likely to materially affect the Group’s internal control over financial reporting. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 190 Directors’ report: Other statutory and regulatory information (continued) Disclosure of information to the auditor Preparation of accounts Each Director confirms that, so far as he/ she is aware, there is no relevant audit information of which our auditor is unaware and that each of the Directors has taken all the steps that he/she ought to have taken as a Director to make himself/herself aware of any relevant audit information and to establish that our auditor is aware of that information. This confirmation is given pursuant to Section 418 of the Companies Act 2006 and should be interpreted in accordance with, and subject to, those provisions. Directors’ responsibilities The following statement, which should be read in conjunction with the Auditor’s report set out on pages 396 to 412, is made with a view to distinguishing for shareholders the respective responsibilities of the Directors and of the auditor in relation to the accounts. Going concern The Group’s business activities and factors likely to affect its future development and performance are disclosed in the Strategic report and Risk review sections of this report. The financial performance is disclosed within the Financial review with funding, liquidity and capital details contained within the Risk performance section. The Group’s objectives and policies in managing the financial risks to which it is exposed are discussed in the Risk management section. The Directors considered it appropriate to prepare the financial statements on a going concern basis. In preparing each of the Group and company financial statements, the Directors are required to: • assess the Group and Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern • use the going concern basis of accounting unless they either intend to liquidate the Group or the Parent company or to cease operations, or have no realistic alternative but to do so. The Directors are required by the Companies Act 2006 to prepare Group and Company accounts for each financial year and, with regard to Group accounts, in accordance with UK-adopted international accounting standards. The Directors have prepared these accounts in accordance with (a) UK-adopted international accounting standards; and (b) IFRS as issued by the IASB, including interpretations issued by the IFRS Interpretations Committee. Pursuant to the Companies Act 2006, the Directors must not approve the accounts unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Company and of their profit or loss for that period. The Directors consider that, in preparing the financial statements, the Group and the Company have used appropriate accounting policies, supported by reasonable judgements and estimates, and that all accounting standards which they consider to be applicable have been followed. The Directors are satisfied that the Annual Report and financial statements, taken as a whole, are fair, balanced and understandable, and provide the information necessary for shareholders to assess the Group and Company’s position and performance, business model and strategy. The Directors are responsible for such internal controls as they determine are necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Directors’ responsibility statement The Directors have responsibility for ensuring that the Company and the Group keep accounting records which disclose with reasonable accuracy the financial position of the Company and the Group and which enable them to ensure that the accounts comply with the Companies Act 2006. The Directors are also responsible for preparing a Strategic report, Directors’ report, Directors’ remuneration report and Corporate Governance Statement in accordance with applicable law and regulations. The Directors are responsible for the maintenance and integrity of the Annual Report and Financial Statements as they appear on our website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. The Directors have a general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities. The Directors, whose names and functions are set out on pages 145 to 148, confirm to the best of their knowledge that: (a) the financial statements, prepared in accordance with (i) UK-adopted international accounting standards; and (ii) IFRS as issued by the IASB, including interpretations issued by the IFRS Interpretations Committee, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole; and (b) the management report, on pages 4 to 58, which is incorporated in the Directors’ report, includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the Principal Risks and uncertainties that they face. Auditor’s report The Auditor’s report on the Financial Statements of Barclays PLC for the year ended 31 December 2023 was unmodified and its statement under Section 496 of the Companies Act 2006 was also unmodified. By order of the Board Hannah Ellwood Group Company Secretary 19 February 2024 Registered in England. Company No. 48839 Registered office: 1 Churchill Place, London E14 5HP Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 191 Remuneration report Annual statement from the Chair of the Board Remuneration Committee Contents Annual statement Executive Director remuneration outcomes at a glance Wider workforce remuneration Directors’ Remuneration Policy Annual report on Directors’ remuneration Dear fellow shareholders 191 195 197 201 207 On behalf of the Board, I am pleased to present the Remuneration report for 2023. Over the next few pages, we set out our key considerations and the remuneration decisions we took as a result – both for the Executive Directors of Barclays PLC and for the wider workforce. Since last year’s report, Sir John Kingman and Julia Wilson have joined the Committee – bringing new perspectives and a wealth of experience. I would like formally to welcome them both. I would also like to thank you, our shareholders, for the support you showed at our 2023 Annual General Meeting, approving both our current Directors’ Remuneration Policy to apply for three years from the date of that meeting – supported by 97% of shareholder votes – and the implementation during 2022 of our previous Directors' Remuneration Policy. Performance in 2023 As always, our remuneration approach is rooted in our commitment to reward sustainable performance. As the Group Chief Executive sets out in his review, our diversified income approach has enabled us to continue to deliver well in 2023 despite an external backdrop of persistent uncertainty – with heightened volatility across asset classes, some significant market disruption, and escalating geopolitical tensions. In this testing environment, we took deliberate, proactive steps to protect the Group: maintaining a prudent approach to risk management; managing our balance sheet with care; and continuing to invest in talent and technology in sustainable growth areas, while maintaining our focus on costs. Barclays demonstrated its sound footing in 2023 and continued to see solid income Board Remuneration Committee Brian Gilvary Chair, Board Remuneration Committee Committee membership and meeting attendance1 Meetings attended/eligible to attend (including ad hoc meetings) Member Brian Gilvary Dawn Fitzpatrick Mary Francis 2 Sir John Kingman Julia Wilson 3 6/6 5/6 6/6 3/3 2/2 Notes: 1 There were five scheduled meetings and one ad hoc meeting of the Committee in 2023. Owing to a prior commitment, Dawn Fitzpatrick was unable to attend one scheduled meeting of the Committee. Committee membership in 2023 2 Appointed with effect from 16 June 2023. 3 Appointed with effect from 1 July 2023. performance across all three of our operating businesses – resulting in Group income of £25.4bn, up 2% on 2022. Operating expenses for 2023 were £16.9bn, a 1% increase on 2022, reflecting business growth, investment spend and inflation – delivering statutory profit before tax of £6.6bn (2022: £7.0bn), down 6%. This included £927m of structural cost actions taken in the fourth quarter to help drive future returns, having reviewed the shape, efficiency and focus of our businesses. Excluding these costs, profit before tax was £7.5bn (2022: £7.7bn, excluding the Over-issuance of Securities) and RoTE was 10.6%, achieving our greater-than-10% target. Our primary frame of reference was financial outcomes 1 on this basis , to understand the underlying performance of the business separate from the costs associated with the decisions we made to shape its future. We ended the year with a CET1 ratio of 13.8%, within our target range of 13% to 14%. We will deliver increased capital distributions to shareholders, up c.37% on 2022, via a total dividend for the year of 8.0p per share and £1.75bn of announced share buybacks – equivalent to a total payout of c.19.4p per share. Although income is down for some business areas, those reductions are from a starting point of strong 2022 performance for most business areas. The Corporate and Investment Bank in 2023 saw income down slightly, a resilient performance given the unsettled macroeconomic backdrop and the lowest investment banking wallet in the last 2 decade . Global Markets continued to grow its income from our top 100 clients and maintained its revenue ranking of 3 sixth . Investment Banking also maintained its sixth rank globally, despite the subdued dealmaking environment, and returned to 4 first in the UK , up from fourth in 2022. For Consumer, Cards and Payments, income was up 18%, reflecting the expansion and deepening of our client relationships – including our latest partnership launch with Microsoft and Mastercard. Income was also up in Barclays UK, supported by the higher interest rate environment, partially offset by competition in mortgage and savings products. + Find more about our approach to pay fairness in our Fair Pay Report 2023 at: home.barclays/annualreport Our UK pay gap figures for 2023 and narrative explaining them are at: home.barclays/diversity + Notes: 1 Page 390 includes a reconciliation of financial results excluding the impact of Q423 structural cost actions for 2023 and the impact of the Over-issuance of Securities for 2022. 2 Source: Dealogic. 3 Global Markets rank and revenue share based on Barclays’ calculations using peer-reported financials. Top 10 peer group includes Barclays, Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase & Co, Morgan Stanley, BNP Paribas, Credit Suisse, Deutsche Bank, and UBS. 4 Source: Dealogic for period covering 1 January 2023 to 31 December 2023. UK rank based on UK investment bank revenue by bank for full year 2023. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 192 Remuneration report (continued) The Committee has maintained its focus on ensuring we reward performance that is sustainable. During 2023 the management team has been embedding a new operating standard – Consistently Excellent – which aims to transform the operational resilience of Barclays. Raising our operating standards and reducing the impact on financial performance of unexpected issues will strengthen our foundation to deliver sustainable performance. This was reflected in our objective setting, performance assessment and reward processes for senior colleagues for 2023, and in our recognition platform for all colleagues, and will be embedded more deeply and widely during 2024. Striving to achieve a consistently excellent standard is becoming part of our culture, and initial feedback suggests our work to equip all colleagues with the right skills to achieve this resonates as a way of driving long-term success. Colleague remuneration Alongside rewarding sustainable performance, our Fair Pay Agenda continues to underpin all our remuneration decisions – ensuring we are paying colleagues fairly for the work they do and recognising the contributions of all, within the resources available to us. This is especially pertinent given the challenges colleagues continue to face – particularly those who are lower-paid, given higher- than-normal increases in the cost of living over recent years. You can read more in the 'Wider workforce remuneration' section on page 204 and in our sixth annual Fair Pay Report published alongside this Annual Report. We have also published our pay gap figures for employees in the UK and in Ireland. Paying at least a living wage to all our colleagues is a central element of our Fair Pay Agenda. We continue to ensure we meet or exceed living wage benchmarks in every jurisdiction in which our employees are based. In the UK our employees already received more than the Living Wage Foundation’s benchmarks, and we are further increasing our minimum UK full-time equivalent salary to £24,000. We continue to meet or exceed Fair Wage Network living wage benchmarks in all other countries. We have continued our work to be simpler, more transparent and more consistent in how we pay our more-junior colleagues. For more junior roles in Barclays UK and the support functions in the UK, we publish starting salaries by role – providing transparency for job candidates and existing staff alike. From 2023, the performance rating of each individual across this population consistently drives their annual bonus outcome as a percentage of their salary. In previous years a range of different approaches were used and the annual bonus outcomes for many of these roles were discretionary. In setting this year's incentive pool we considered Barclays’ financial and non- financial performance, and the performance of the individual businesses that make up the Group, in both absolute and relative terms. We considered each business's contribution to the achievement of our strategic targets and its importance to our future success. The Committee also wanted to recognise the resilience across our operating businesses, delivered against a backdrop of macroeconomic uncertainty, as well as the support our colleagues provided to customers and clients. Taking all of this into account, the Committee has approved a Group incentive pool for 2023 performance of £1,745m (2022: £1,790m), down 3% compared to the final incentive pool for 2022, which included a c.£500m reduction for risk and control issues that came to light during 2022. Risk and conduct adjustments to the 2023 incentive pool are materially less than those for 2022, so the incentive pool before risk adjustments each year fell by c.15% from 2023 to 2022. This level of incentive funding for 2023 reflects the lower year-on-year financial outcomes in some business areas, while also enabling us to reward colleagues for the performance delivered – recognising the progress made towards our strategic priorities and our ambition to be consistently excellent in our operations. We also considered the competitive market for hiring and retaining the talent we need to achieve those priorities in the future. In doing so, we weighed the views and expectations of you as shareholders, of our customers and clients, of our colleagues, and of our stakeholders in wider society. Consistent with our Fair Pay Agenda, we have chosen to protect the incentive outcomes for our more junior colleagues – so, in business areas where incentive spend was down year on year, more senior colleagues experienced greater reductions in annual bonus awards. As always, a significant portion of the pool will be delivered in shares, most of which will be deferred over a number of years. Group income £25,378m 2022: £24,956m Group profit before tax £6,557m 2022: £7,012m Group profit before impairment (excluding adjusting items)1 £9,365m 2022: £8,906m Group profit before tax (excluding adjusting items)1 £7,484m 2022: £7,686m Group RoTE (excluding adjusting items)1 10.6%2022: 11.6% Group cost: income ratio (excluding adjusting items)1 63%2022: 64% Group CET1 ratio 13.8%2022: 13.9% Group compensation to income ratio 34.4%2022: 33.5% Group incentive pool £1,745m 2022: £1,790m Note: 1 Adjusting items: Q423 structural cost actions in 2023 and the impact of the Over-issuance of Securities in 2022. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 193 Remuneration report (continued) Executive Director remuneration The Executive Directors' pay in 2024 The Committee carefully considered the performance measures for the Executive Directors’ 2024 annual bonus and the 2024-2026 LTIP, and updated elements of both the financial and non-financial measures in each plan to better reflect the revised targets set out under 'Our strategy' from page 11, and our long-term climate strategy. For the 2024 annual bonus, a total operating expenses measure replaces cost: income ratio – reflecting the continued importance of cost discipline while providing a more focused and simpler measure of cost control within the year. Other financial measures and weightings in the bonus are unchanged. For the 2024-2026 LTIP we have increased slightly the weighting of RoTE, from 25% to 30%, given the focus on improving RoTE within the Group's 2026 targets. This is accommodated via a small reduction to the weighting of the relative total shareholder return measure from 25% to 20%. All other financial measures in the LTIP remain unchanged from the previous year's award, including the continued use of cost: income ratio as a longer-term cost measure. We also reviewed the non-financial measures for both the 2024 annual bonus and 2024-2026 LTIP, to ensure they reflect the Group’s shorter- and longer- term priorities. Our commitment to align our financing with the goals and timelines of the Paris Climate Agreement has been and remains a key component of our climate strategy. Many of our climate and sustainability targets are longer term, including through to 2050, and progress towards these is expected to be non- linear. As such, we have retained the Climate & sustainability category within the Strategic non-financial assessment for the annual bonus and LTIP, but increased its weighting in the LTIP from 10% to 15% – accommodating this by reducing the weighting of the LTIP risk-related measures (which this year also incorporate assessment of operational excellence) from 10% to 5%. Determining Executive Directors' pay outcomes The Committee considered the Executive Directors’ annual bonus outcomes in the context of the Group’s performance and the performance of each Executive Director during 2023. The 2023 annual bonus outcome for C.S. Venkatakrishnan (known as Venkat) was 53.3% of maximum, and for Anna Cross was 54.3% of maximum (2022: 75.4% for both). Profit before tax provided a 21.1% outcome out of a possible 50%, and the cost: income ratio provided a 2.7% outcome out of a possible 10%. Performance against the strategic non- financial measures was good, which resulted in a 16.5% outcome out of a possible 25% and the performance of each of the Executive Directors against their personal objectives was also assessed and taken into account (13.0% for Venkat and 14.0% for Anna out of a possible 15%). Before finalising those outcomes, the Committee reflected on their appropriateness. We reviewed the underlying financial health of the Group, which is strong and well-capitalised. We considered the bonus outcomes in the context of those for the wider workforce, ensuring suitable alignment both this year and over a multi-year period, and also compared to historical outcomes for the Executive Directors in the context of performance each year. We concluded that the outcomes are appropriate in the context of the performance achieved and that no further discretionary adjustment was warranted. Neither Venkat nor Anna Cross participated in the 2021-2023 LTIP cycle, as neither was an Executive Director at the time those awards were granted. The Committee did, however, assess performance against the measures for this LTIP cycle to determine the vesting outcome for the previous Group Finance Director, who is the sole remaining participant. This was 53.2% of the maximum, as outlined later in this report. The Committee decided to grant awards under the 2024-2026 LTIP cycle with a face value at grant of 140% of Fixed Pay for Venkat and 134% of Fixed Pay for Anna Cross, reflecting the personal contribution made by each to a solid 2023 performance – and to provide each with a significant incentive award subject to forward-looking performance conditions during 2024 to 2026. At the same time the ways we approach and monitor risk, and ensure a high standard of operational performance, are fundamental to delivering sustainable performance every year. To reflect our focus on this across Barclays, we have included a Risk & operational excellence category within the Strategic non-financial element of the 2024 annual bonus, with a weighting of 10% – accommodated via a slight reduction in the weighting of other Strategic non-financial bonus measures. The Climate & sustainability, Customers & clients, and Colleagues categories are each weighted 5%. The Committee will continue to review the measures and weightings for the Executive Directors' incentives each year, to ensure they appropriately support the delivery of our strategy and reflect our priorities. In early 2024, the Committee reviewed the level of Fixed Pay for Venkat and Anna Cross, in the same way and at the same time as fixed pay was reviewed for the wider workforce. The Committee increased Fixed Pay by 2.5% for both Venkat and Anna, resulting in Fixed Pay of £2,947,000 and £1,845,000 respectively, effective from 1 March 2024. These percentage increases are significantly lower than the average across the wider workforce, in particular for other UK employees within the scope of the 2024 UK pay deal with the union Unite – with a 5.55% budget for salary increases for junior employees and a 3.75% budget for other union-recognised employees. Even following these Fixed Pay increases, the total compensation opportunity for each Executive Director remains well behind the median opportunity for equivalent roles across our international banking peer group. Shareholder alignment Of the total variable pay awards to Venkat and Anna Cross in respect of 2023 performance (2023 annual bonus plus 2024-2026 LTIP), 96% and 94% respectively will be in shares that must be retained for a period of between one and eight years from grant – aligning the Executive Directors' interests with those of our shareholders. Both Venkat and Anna Cross already have significant shareholdings. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 194 Remuneration report (continued) Group Chair and Non-Executive Director fees The Committee periodically reviews the Group Chair's fee, and the Directors' Remuneration Policy allows for increases of up to 20% during the policy's three-year term. The Committee last increased the Group Chair's fee with effect from 1 January 2023, having considered the fee in the context of the Chair fees paid across our international banking peer group – with a particular focus on the UK banks, given the regional differences in both the role and pay for non-executive directors including chairs. Prior to that, this fee had remained at the same level since 2015. Early in 2024, the Committee approved a 2% increase in the Group Chair's fee, from £840,000 to £856,800, effective 1 January 2024. Each year £100,000 of the fee will continue to be used to purchase Barclays shares that will be retained on the Group Chair's behalf until he retires from the Board. No other changes were made to the Group Chair's remuneration arrangements or benefits. In January 2024 the Board reviewed the other Non-Executive Directors' fees, which were also last increased with effect from 1 January 2023, and approved 2% increases to those fees effective 1 January 2024 (with the relevant Non- Executive Directors having recused themselves from those discussions). Update in respect of Jes Staley's remuneration As outlined in the 2021 Annual Report, Jes Staley stepped down from the role of Group Chief Executive on 31 October 2021 and his unvested awards were suspended pending further developments in respect of the regulatory and legal proceedings related to the FCA and PRA investigation regarding Mr Staley. In October 2023, the FCA issued a Decision Notice in relation to Mr Staley. The Committee considered the detailed findings in this Decision Notice and concluded that Mr Staley should be ineligible for or forfeit a number of his awards, including the bonus award in respect of the 2021 performance year, all of his unvested LTIP awards – both those for which the performance had already been assessed and those still subject to performance conditions – and his other unvested deferred bonus awards from earlier years. The total value of the lapsed LTIP awards and forfeited deferred bonus awards at that time was £17.8m. Looking ahead As we move into 2024, the Committee maintains its commitment to rewarding sustainable performance. We will use our remuneration policies and practices to incentivise the Executive Directors and the management team to deliver our three year plan, improving operational and financial performance, and improving shareholder returns. We will support the management team to use performance management and pay: – to align the wider workforce to those same priorities – to reinforce the importance of good conduct, strong controls and risk management and – to support Barclays' Purpose, Values and Mindset, and our ambition to achieve a standard of being consistently excellent. We will continue to engage with our shareholders and other stakeholders on pay and will be meeting with our largest shareholders to discuss our pay outcomes for 2023. Beyond this, we will maintain focus on our Fair Pay Agenda, continuing to support our colleagues and ensuring the way we pay our people supports the long-term health and success of the Group. Brian Gilvary Chair, Board Remuneration Committee February 2024 Removal of the regulatory requirement to operate a 2:1 'bonus cap' With effect from 31 October 2023, the PRA and FCA removed the UK regulatory requirement for certain banks, including Barclays, to apply a maximum 1:1 ratio of variable to fixed remuneration for employees who are deemed to have a material risk impact on their firm – known as Material Risk Takers (MRTs) – or up to a 2:1 ratio if shareholders approve the adoption of that higher maximum. Our shareholders approved the adoption of a 2:1 maximum ratio for Barclays MRTs around the time that these regulations first came into effect. Going forward, such banks – including Barclays – will be permitted to set their maximum variable pay ratios to be greater than 2:1. As the new regulations were published close to the end of 2023, the Committee determined that the 2:1 cap would continue to apply in Barclays for the 2023 performance year. The Committee will consider this further in respect of 2024 and future years. A relatively small number of our employees are potentially impacted by this regulatory change. Our Executive Directors’ maximum variable pay opportunity is governed by the Directors' Remuneration Policy that shareholders approved at our 2023 AGM, and therefore is unchanged by these new regulations. The Directors' Remuneration Policy will continue to apply until a new policy is approved by shareholders. No new Directors' Remuneration Policy is proposed for 2024. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 195 Remuneration report (continued) At a glance – Executive Director remuneration for 2023 Fixed Pay Pensions and benefits + + Annual bonus LTIP + = Total remuneration Total remuneration outcomes (£000) C.S. Venkatakrishnan (Group Chief Executive) 1 2023 max 2023 actual 2022 actual Anna Cross (Group Finance Director) 2023 max 2023 actual 2 2022 actual 2,773 2,057 4,641 5,197 5,926 9,915 Proportion in shares of 2023 variable pay3 of maximum total remuneration (2023 max) 96% 80% Proportion in shares of 2023 variable pay3 of maximum total remuneration (2023 max) 94% 80% 1 The LTIP values shown for C.S. Venkatakrishnan's and Anna Cross's 2022 actual and 2023 actual total remuneration are nil as neither participated in the 2020-2022 or 2021-2023 LTIP cycles. The LTIP values shown for 2023 maximum represent the maximum LTIP award value that could have been granted under the current Directors' Remuneration Policy. 2 Anna Cross was appointed as Group Finance Director on 23 April 2022.The values shown for 2022 are part-year values for the time she served as an Executive Director during 2022. 3 2023 variable pay comprises the actual 2023 annual bonus and the grant-date face value of the 2024-2026 LTIP award that will be granted in respect of 2023 performance. See single total figure for 2023 remuneration on page 207 + Annual bonus outcomes Annual bonus measures Financial4 • Profit before tax • Cost: income ratio Strategic non-financial Personal Total Final outcome approved by the Committee Weighting (proportion of bonus opportunity) Outcome C.S. Venkatakrishnan 60.0% 50.0% 10.0% 25.0% 15.0% 100.0% 23.8% 21.1% 2.7% 16.5% 13.0% 53.3% Outcome Anna Cross 23.8% 21.1% 2.7% 16.5% 14.0% 54.3% 4 The financial measures are defined as excluding material items, which for 2023 consist of Q423 structural cost actions of £927m. Delivery of remuneration5 Performance year Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Fixed Pay Pension 50% in cash paid monthly Cash in lieu of pension contributions 50% in shares with restrictions lifting over five years Annual bonus Performance period Max. 50%6 in cash Remainder in shares vesting over two years Holding period  LTIP Preliminary performance period Three-year post-grant performance period Deferral in shares over five years Holding period 5 Illustrative timing that the different elements of remuneration are normally received. Fixed Pay shares are granted quarterly and released in five equal annual instalments on the first five anniversaries of grant. All tranches of annual bonus and LTIP shares typically vest in March of the relevant year and are subject to a 12-month holding period from the date they vest. 6 In recent years, less than 50% of annual bonus has been delivered in cash in year one, and a greater proportion of annual bonus has been delivered in shares over years one, two and three. 2,8602,8602,7673563564812,6741,4251,9494,0251,7881,7881,185106106691,6208798032,41253.3%54.3% Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 196 Remuneration report (continued) Remuneration policy for the Executive Directors – implementation for 2024 Delivery of remuneration is intended to be the same as for the 2023 performance year, as outlined on the previous page. Element Fixed Pay Pensions and benefits Annual bonus LTIP Shareholding requirement C.S. Venkatakrishnan Anna Cross 2.5% increase to £2,947,000 effective 1 March 2024 2.5% increase to £1,845,000 effective 1 March 2024 Pension: £147,350 effective 1 March 2024, equivalent to 5% of Fixed Pay Benefits: entitlement as per the policy Pension: £92,250 effective 1 March 2024, equivalent to 5% of Fixed Pay Benefits: entitlement as per the policy Up to 93% of year-end Fixed Pay, based on forward- looking performance measures set near the start of the year Up to 90% of year-end Fixed Pay, based on forward- looking performance measures set near the start of the year Up to 140% of year-end Fixed Pay, based on forward- looking performance measures set shortly before the time of grant Up to 134% of year-end Fixed Pay, based on forward- looking performance measures set shortly before the time of grant Holding requirement: 233% of Fixed Pay Post-employment shareholding requirements apply for two years Holding requirement: 224% of Fixed Pay Post-employment shareholding requirements apply for two years Alignment of performance measures and strategy Weighting in annual bonus and LTIP Alignment to strategy Performance measures Financial Profit before tax (with a CET1 ratio underpin) Total operating expenses (at specific FX) Return on tangible equity (RoTE) Cost: income ratio CET1 ratio Relative total shareholder return Personal Strategic non- financial 10% 50% ••••••• •• 15% 30% 20% 25% A measure of annual financial performance and a key factor that drives RoTE A measure of the ability to effectively manage costs (measured at fixed foreign exchange rates to reduce impacts outside of management control) 30% A measure of our ability to generate returns for shareholders that underpins the Group’s capital allocation and performance management processes 10% A measure of the productivity of our business operations over time 10% A measure of capital strength and resilience, determined in accordance with regulatory requirements A measure of Barclays' share performance (comprising share price appreciation and dividends paid) relative to those of a basket of comparable firms Individual objectives for each Executive Director, aligned to our strategic priorities Includes the Group's non-financial key performance indicators, including Climate & sustainability as a strategic priority, Customers & clients and Colleagues as key stakeholder groups, and Risk & operational excellence, which is fundamental to operating at a consistently excellent standard to deliver sustainable performance Alignment to stakeholder groups • • • • • • •••• •••• l 2024 annual bonus l 2024-2026 LTIP l Customers & clients l Colleagues l Society l Investors Share ownership (£000) Shareholding shown as at 31 December 2023, using Q4 2023 average share price of £1.4374. C.S. Venkatakrishnan Anna Cross ¢ Actual shareholdings (including the estimated after-tax value of unvested ¢ Unvested shares subject to performance conditions (which do not count shares not subject to performance conditions) towards the requirement) ¢ Shareholding requirement Based on 31 December 2023 Fixed Pay of £2,875k. Based on 31 December 2023 Fixed Pay of £1,800k. C.S. Venkatakrishnan has until 31 October 2026 (five years from the date of his appointment as Group Chief Executive) to meet this shareholding requirement. Anna Cross has until 22 April 2027 (five years from the date of her appointment as Group Finance Director) to meet this shareholding requirement. 6,5214,1126,6992,1311,3334,032 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 197 Remuneration report (continued) Wider workforce remuneration Our remuneration philosophy Our Fair Pay Agenda Our remuneration philosophy applies to all employees and sets out the way we approach remuneration. Its aim is to be as simple and clear as possible, while ensuring strong alignment with risk and conduct as well as our Values and Mindset. It is also closely aligned with Provision 40 of the FRC's UK Corporate Governance Code. The remuneration decisions set out in this report are a result of the application of our remuneration philosophy in respect of 2023. Paying people fairly is an essential element of our pay philosophy. We have developed our fair pay approach over a number of years, and we continue to ensure that fairness is a key and explicit consideration in the way we make all of our pay decisions. Our fair pay principles Fair pay for the lowest paid Paying fairly for work done, in a simple and transparent way. Philosophy Attract and retain talent needed to deliver Barclays’ strategy Align pay with investor and other stakeholder interests Reward sustainable performance Support Barclays’ Values and culture Align with risk appetite, risk exposure and conduct expectations Be fair, transparent and as simple as possible Long-term success depends on the talent of our employees. This means attracting and retaining an appropriate range of talent to deliver against our strategy, and paying the right amount for that talent. Remuneration should be designed with appropriate consideration of the views, rights and interests of stakeholders. This means listening to our shareholders, other investors, regulators, government, customers and employees and ensuring their views are appropriately represented in remuneration decision-making. Sustainable performance means making a positive and enduring difference to investors, customers and communities, delivering good customer outcomes, taking pride in leaving things better than we found them and playing a valuable role in society. Results must be achieved in a manner consistent with our Values. Our Values, culture and Mindset should drive the way that business is conducted. Designed to reward employees for achieving results in line with the Group’s risk appetite and conduct expectations. We are committed to ensuring pay is fair, simple and transparent for all our stakeholders. All employees and stakeholders should understand how we reward our employees, and fairness should be a lens through which we make remuneration decisions. Equal opportunities to progress Providing equal employment opportunities to all, so everyone can enjoy a successful career at Barclays. Engaging with colleagues Engaging with colleagues to understand their views on the culture of the organisation and enabling the representation of employees in our remuneration decision-making process. Alignment of employee and Executive Director pay Linking both Executive Director and employee pay to sustainable business performance. Equal pay commitment Rewarding employees fairly for their contribution and making sure pay and performance decisions never take into account any protected characteristics. Supporting our colleagues We provided higher salary increase budgets for junior employees, including under the UK pay deal with Unite In business areas where the incentive spend was reduced, we protected incentive outcomes for junior employees Over 97% of employees globally are eligible for private medical cover We continued to enhance our wellbeing provision, including the addition of a new wellbeing training module We offer dedicated menopause support through our healthcare providers across all our large locations as well as training for people leaders More information on our fair pay approach can be found in our Fair Pay Report 2023 at: home.barclays/annualreport + Diversity ambitions and pay gaps Diversity ambitions Pay gaps 33% 50% 12.5% 5% 33% females at Managing Director and Director level by 2025 50% increase in Managing Directors from underrepresented ethnicities in the UK and US combined by 2025 (from 2022 baseline) Increase underrepresented minority representation in the UK by 12.5% by 2025 (from 2023 baseline) Increase underrepresented minority representation in the US by 5% by 2025 (from 2023 baseline) We disclose our pay gaps for locations including the UK, Ireland and France. • Our gender and ethnicity pay gaps are due to underrepresentation of females and certain ethnic minority groups in senior and other higher-paying roles. • Being transparent about this, and the resulting pay gaps, For information on our progress against our diversity ambitions, see page 210 is important as it helps us track where we are in the pursuit of our goals and understand what tangible actions we can take to improve representation over time. + + + UK gender and ethnicity pay gaps for 2023 are shown in our UK Pay Gaps 2023 disclosure, which can be found at: home.barclays/diversity More information on our diversity ambitions and pay gaps can be found at: home.barclays/diversity Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 198 Remuneration report (continued) Alignment of remuneration policy for the wider workforce and Executive Directors Most elements of remuneration policy are aligned for the wider workforce and the Executive Directors. Differences in policy implementation between seniority levels reflect our remuneration philosophy. For example, the balance between fixed and variable pay is shifted toward fixed pay for employees in more-junior roles and towards variable pay for those in more-senior roles. A large proportion of variable pay for senior employees, or the majority of variable pay and half of Fixed Pay for the Executive Directors, is delivered in shares over multiple years – aligning their interests more closely with those of shareholders – whereas pay is primarily in cash for more-junior employees. Aligned with our Fair Pay Agenda, UK employer pension contributions are also higher for our junior employees. The table below provides a summary of remuneration arrangements for the wider workforce and the Executive Directors. Element How Executive Director policy aligns Senior employees Junior employees Fixed pay Delivery Pensions Benefits Annual bonus Reflects the individual’s role, skills and experience and is reviewed annually. Fixed pay is increased where justified by role change, increased responsibility or a change in the market rate for the role. Salaries may also be increased in line with local statutory requirements and with union and works council commitments. All in salary for most, paid in cash. Some roles are also entitled to receive certain cash allowances. All in salary for most. For a small number of senior employees (2% globally) a proportion is delivered in Role Based Pay (RBP), in cash or shares, to recognise the seniority, scale and complexity of their role. The RBP value may change, for example, where justified by a role or responsibility change or a change in the market rate for the role. Reflects the individual’s role, skills and experience, set to provide a market- competitive total compensation opportunity, and is reviewed annually. Annual increases are typically no more than the average increase for UK employees. 50% is delivered in cash (paid monthly), and 50% in shares. The shares are delivered in four equal quarterly instalments and are then subject to a holding period, with restrictions lifting over five years. Competitive pension offering set by location. Minimum of 12% of salary for more junior colleagues in the UK. Competitive pension offering set by location. Minimum of 10% of salary in the UK. The Executive Directors receive cash in lieu of pension equal to 5% of Fixed Pay (equivalent to 10% of the cash element of Fixed Pay). Market-aligned benefits offering appropriate to the role and reflecting local market practice to support with health and wellbeing. Market-aligned benefits offering, but typically a lower proportion of total pay than for junior employees. Market-aligned benefits offering, but typically a lower proportion of total pay than for the wider workforce. Annual bonuses incentivise and reward the achievement of Group, business and individual objectives, and reward employees for demonstrating individual behaviours in line with Barclays’ Values and Mindset. All employees are considered, subject to eligibility criteria. Assessed against predetermined targets and measures to align with financial performance, strategic non-financial performance and personal performance. Delivery In cash following the performance year. Long Term Incentive Plan (LTIP) award Not applicable to the wider workforce. For many a proportion of annual bonus is deferred to future years. Deferred bonuses are generally delivered half in deferred cash and half in deferred shares, released in equal annual instalments over three, four, five or seven years, with a further six or 12-month holding period for some roles. The majority of annual bonus is generally deferred in shares and then subject to a further 12-month holding period. Across the annual bonus and any LTIP award combined, deferral will always at least meet regulatory requirements. The value received from LTIP awards depends on assessment of performance over a three-year period against Group- wide financial and non-financial measures. Delivery is in shares between the third and seventh year from grant, with each release subject to a further 12-month holding period. All-employee share plans Provide an opportunity for all employees to acquire Barclays shares, in some locations on beneficial terms. Barclays operates all- employee share plans in locations representing 99% of employees globally. Role of the Remuneration Committee in wider workforce remuneration The Committee considers the overarching objectives, principles and parameters of remuneration policy across the Group, ensuring a coherent approach in respect of all employees. In discharging this responsibility the Committee seeks to ensure the policy is fair and transparent, avoids complexity, and assesses – among other things – the impact of pay arrangements in supporting the Group’s culture, Values and strategy and on all elements of risk management. The Committee performs the following activities in relation to wider workforce remuneration: – Ensures alignment of remuneration with the remuneration philosophy, Fair Pay Agenda and Barclays' Purpose, Values, Mindset, conduct expectations and long-term success – Ensures alignment of wider workforce and Executive Director remuneration policies – Approves the bonus pool across the wider workforce and reviews wider workforce pay outcomes – Reviews the annual Group fixed pay budgets. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 199 Remuneration report (continued) Performance management Performance management plays a key role both in supporting colleagues to progress their careers and in making Barclays a consistently excellent organisation. Our performance management approach centres on continuous performance management principles. This encourages people leaders to discuss performance throughout the year, including reviewing progress made against ‘what’ has been achieved (performance versus individual objectives) and ‘how’ it has been achieved (behaviours in line with our Values and Mindset, in addition to our leadership behaviours for senior leaders). At year-end, colleagues are assessed separately on the ‘what’ and the ‘how' of their performance. This assessment is reflected in colleague performance ratings and bonus outcomes. For 2023, our aspiration to be a consistently excellent organisation was reflected in performance management for senior colleagues – and will be embedded more deeply and widely during 2024. + For more details see our Fair Pay Report 2023 at: home.barclays/annualreport Engaging with stakeholders on remuneration We seek to consider the views of all of our stakeholders in remuneration decision-making, including colleagues, investors and regulators. Colleagues Investors Other stakeholders We engage with colleagues to understand their views through our Your View surveys, union and works council engagements, and townhalls. We also engage with colleagues through our Employee Resource Groups, webcasts, workshops and events. Our ongoing engagement with the union Unite in the UK covers a range of topics, such as fair pay and the increasing cost of living, and this is another opportunity for the views of colleagues to inform decision-making. For information on our 2024 pay deal with Unite see 'Salary budget for 2024', below. We publish information to explain to colleagues how the Group’s performance and pay approach aligns to the Fair Pay Agenda, and to help them understand the employee benefits Barclays provides – so they can make the most of what is on offer. To communicate pay in a clear way, each colleague receives a Compensation Profile detailing their fixed pay and incentives for the previous year and their fixed pay for the following year. We recognise that remuneration is an area of particular interest to some shareholders. We listen to their views and take these into account when setting remuneration or considering changes to remuneration policies. Accordingly, the Group Chair or Remuneration Committee Chair hold meetings each year with major shareholders and representative groups to understand their views, accompanied by senior Barclays employees. In 2023, we discussed our remuneration policies and our 2022 pay outcomes with representatives of some of our institutional shareholders and proxy voting agencies. This kind of engagement helps inform the Committee's work and contributes directly to the decisions it makes in relation to Executive Directors' remuneration. For example, shareholder views were a key consideration in the Committee's decision to increase the weighting of the Climate & sustainability category from 10% to 15% for the 2024-2026 LTIP cycle. Each year, the Barclays Internal Audit or Chief Controls Office teams review our remuneration policies and how we've operated our remuneration processes, to provide assurance to the management team and the Committee that we are compliant with regulatory requirements. Whenever regulations on remuneration are changed, we review our remuneration policies and practices to ensure they are compliant – and make changes if necessary. In 2023 we continued to engage with our regulators to ensure we understand their perspectives, and to explain our performance, pay priorities and decision-making. We took their views into consideration when making our remuneration decisions for 2023, and continue to ensure we have ongoing regulatory dialogue on remuneration. Fixed pay decisions for 2024 Living wage employer We continue to ensure that we at least meet the living wage benchmarks for each location, and are an accredited Living Wage employer in the UK. Salary budget for 2024 We targeted our salary increase budgets so there are higher increases for the most junior colleagues. In the UK, with the union Unite, we have agreed a salary increase budget of 5.55% for our junior employees and 3.75% for other union-recognised employees. For junior employees in India and the US salary increase budgets are 8% and 3.25% respectively. The percentage Fixed Pay increases for the Executive Directors are below the average percentage increases for the wider workforce; the Group Chief Executive and Group Finance Director will each receive a 2.5% increase in Fixed Pay. Exceeding the living wage in key locations We pay at least the living wage in all locations. Below are our minimum hourly rates from 1 March 2024 for the UK, USA and India, where 90% of employees are based. £13.19UK 2023: £12.23 $22.50USA 2023: $22.50 ₹150.00 India 2023: R143.00 Pay transparency We have continued to simplify our pay approach for junior colleagues, making it easier for them to understand how their pay is set and managed. Pay levels and annual salary increases for our most junior roles in Barclays UK and support functions in the UK are based on role type, and starting salaries are published. Annual bonus approaches for those populations have also been harmonised. Previously, bonus outcomes were fully discretionary for many of these roles. From 2023, annual bonus outcomes are a set percentage of salary, differentiated by each employee's performance rating. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 200 Remuneration report (continued) Incentive pool and annual bonus outcomes for 2023 Determining the Group incentive pool Group incentive pool and Group Chief Executive bonus outcomes over the years In determining the 2023 Group incentive pool, the Committee considered: • The Group's financial and non-financial performance during 2023 (both absolute and relative) • The performance of individual businesses within the Group and their contributions to our strategic targets and vision • The Group’s capital position and current and future risks • The need to reward strong performers appropriately, as well as recognising colleagues who have exemplified the Barclays Values and Mindset • Compensation market data and expected market trends, to maintain competitiveness where performance warrants. The Committee used its judgement to establish the right balance between annual bonus outcomes that reflect the performance of the Group and managing the Group's cost base, while supporting its ability to attract, retain and reward colleagues who will drive the delivery of the Group’s strategy and sustainable growth for shareholders in the future, in line with our remuneration philosophy. On that basis, the Committee approved a Group incentive pool for 2023 performance of £1,745m (2022: £1,790m), down 3% compared to the final incentive pool for 2022, which itself incorporated a c.£500m reduction for risk and control issues that came to light during 2022. The risk and conduct adjustments to the 2023 incentive pool are materially less than those for 2022, so the incentive pool before risk adjustments each year fell by c.15% from 2023 to 2022 – as seen in the chart on the right. The Group incentive pool and Group Chief Executive bonus outcomes The incentive approach for our Executive Directors is significantly more structured than for other employees, as required by institutional shareholders for directors of UK-listed companies. This more-structured approach, with a need for direct alignment to financial performance metrics, leads to greater year-on- year volatility in incentive outcomes – both up and down – for the Executive Directors compared to other employees. For 2023, like every year, the Committee considered the Executive Director bonus outcomes in the context of the bonus outcomes for the wider workforce, ensuring appropriate alignment both this year and over a multi-year period. It also reviewed the historical outcomes for the Executive Directors in the context of performance each year and concluded they were appropriate in the context of the performance achieved. Consistent with our Fair Pay Agenda, incentive outcomes for junior employees are largely protected, so, in business areas where incentive spend was down year on year, more senior colleagues experienced greater reductions in annual bonus awards. Key performance metrics 2018 2019 2020 2021 2022 2023 Profit before impairment (ex. adjusting items)1 Profit before tax (ex. adjusting items)1 RoTE (ex. adjusting items)1 CET1 ratio Group compensation to income ratio2 7,169m 8,118m 8,056m 7,761m 8,906m 9,365m 5,701m 6,206m 3,218m 8,414m 7,686m 7,484m 8.5% 9.0% 3.4% 13.5% 11.6% 10.6% 13.2% 34.1% 13.8% 33.9% 15.1% 15.1% 13.9% 34.2% 34.7% 33.5% 13.8% 34.4% < Group incentive pool (£m) Group Chief Executive bonus outcome (% of maximum) < Risk and conduct adjustments (£m) Notes: 1 Figures exclude the following adjusting items (pre-tax for profit and post-tax for RoTE): 2023: Q423 structural cost actions (£927m pre-tax and £739m post-tax); 2022: impact of Over-issuance of Securities (£674m pre-tax and £552m post-tax); 2021: impact of Over-issuance of Securities (£220m pre-tax and £170m post-tax); 2020: litigation and conduct (£153m pre-tax and £112m post-tax); 2019: litigation and conduct (£1,849m pre-tax and £1,733m post- tax); 2018: litigation and conduct (£2,207m pre-tax and £2,136m post-tax). 2 2018 Group compensation to income ratio excludes £140m relating to GMP charge post-retirement benefits. Annual percentage change in remuneration of Directors and employees • The annual percentage change in fixed pay earned in 2023, compared to 2022, is 3% for the Group Chief Executive and 9% for the median UK employee – reflecting the Fixed Pay and salary increases awarded in early 2023. + Full details and supporting narrative See page 223 Group Chief Executive pay ratio: 83:1 • Our Group Chief Executive median pay ratio for 2023 is down in comparison to 2022 (101:1) . • This is due to a decrease in the CEO single total figure for remuneration from 2022 to 2023 and an increase in median total pay of UK employees over the same period. + Full details and supporting narrative See page 222 05001,0001,5002,0002,5000%20%40%60%80%100%Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 201 Remuneration report (continued) Directors’ Remuneration Policy The Directors' Remuneration Policy was approved at the AGM held on 3 May 2023 and applies for three years from that date. The Committee reviewed the Directors' Remuneration Policy and concluded that it has been operating effectively and is well aligned with our remuneration philosophy. A summary of the policy for the Executive Directors, including key remuneration elements and its implementation for 2023 and 2024, is set out below. Remuneration policy summary – Executive Directors The full policy, including arrangements for recruitment and leaver provisions, and the remuneration policy for Non-Executive Directors, can be found on pages 209 to 217 of the 2022 Annual Report, which is available at home.barclays/annualreport. Element and purpose Operation 2023 pay outcomes Implementation for 2024 Fixed Pay To reward skills and experience appropriate for the scale, complexity and responsibilities of the role and to provide the basis for a competitive remuneration package. Pension To support Executive Directors to build long- term retirement savings. Benefits To provide a competitive and cost-effective benefits package appropriate to the role and reflecting local market practice, and to support the health and wellbeing of the Executive Directors. • Determined based on the individual’s role, skills and experience and set at a level that aims to provide an appropriately competitive total compensation opportunity, which is benchmarked against similar roles within the international banking peer group used by the Committee when considering the Executive Directors' pay. • Delivered 50% in cash (paid monthly) and 50% in shares quarterly (subject to a holding period of five years, with 20% released annually). • Reviewed annually. Increases will normally be no more than the average annual increase for UK employees. • Delivered as an annual cash allowance in lieu of participation in a pension arrangement. • The maximum is currently 5% of Fixed Pay (equivalent to 10% of the cash element of Fixed Pay). Effective 1 March 2023: Effective 1 March 2024: C.S. Venkatakrishnan £2,875,000 Anna Cross £1,800,000 C.S. Venkatakrishnan 2.5% increase to £2,947,000 Anna Cross 2.5% increase to £1,845,000 For comparison, the 2024 UK pay deal provides a salary increase budget of 5.55% for junior employees and a 3.75% budget for other union- recognised employees. Effective 1 March 2023: Effective 1 March 2024: C.S. Venkatakrishnan £143,750 C.S. Venkatakrishnan £147,350 Anna Cross £90,000 (5% of Fixed Pay for each) Anna Cross £92,250 Pension will remain at 5% of Fixed Pay Benefits as per policy • A range of benefits is provided including Benefits as per policy private medical cover, annual health check, life insurance and ill health income protection, and use of a Company vehicle and driver when required for business purposes (including any tax liabilities that may arise from these benefits). • If an Executive Director relocates to perform their role, additional support may be provided for a defined and limited period of time, in line with Barclays’ general employee mobility policies and practices. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 202 Remuneration report (continued) Element and purpose Operation 2023 pay outcomes Implementation for 2024 • Annual bonus awards are discretionary and determined by the Committee based on performance in the year. • Performance is measured against Group and personal objectives set towards the start of the year, covering financial and non-financial measures (at least 60% of the bonus opportunity normally being based on financial factors). • Delivered in cash and shares, which may be deferred and/or subject to a holding period. • The maximum annual bonus opportunity is 93% of Fixed Pay for the Group Chief Executive and 90% of Fixed Pay for the Group Finance Director. • Although the Committee takes a structured approach to considering the level of bonus outcome each year, any bonus award is discretionary and awards can be from zero to the maximum. • Awards are subject to malus and clawback provisions (described in the risk and conduct section). • Awards are discretionary and determined by the Committee based on satisfactory performance in the year. • Performance is measured over three years against measures set by the Committee (at least 70% of each award normally being based on financial factors). • Delivered in shares and subject to a holding period, vesting no faster than permitted by regulations (currently in five equal tranches, from the third to the seventh anniversary of grant). • The maximum LTIP opportunity is 140% of Fixed Pay for the Group Chief Executive and 134% of Fixed Pay for the Group Finance Director. • Although the Committee takes a structured approach to considering the level of LTIP outcome, any LTIP award is discretionary and awards can be from zero to the maximum. • Awards are subject to malus and clawback provisions (described in the risk and conduct section). • Executive Directors are entitled to participate in our UK all-employee share plans: Barclays Sharesave and Barclays Sharepurchase. In respect of 2023 performance year: C.S. Venkatakrishnan’s annual bonus was £1,425,000 (53.3% of maximum) Anna Cross’s annual bonus was £879,000 (54.3% of maximum) In respect of 2023 performance year: C.S. Venkatakrishnan will be granted a 2024-2026 LTIP award with a grant- date face value of 140% of Fixed Pay Anna Cross will be granted a 2024-2026 LTIP award with a grant- date face value of 134% of Fixed Pay Performance measures and weightings for the 2024-2026 LTIP cycle have changed slightly from those for the 2023-2025 LTIP cycle – more information is provided on page 219-220. In respect of the 2021-2023 LTIP cycle, neither C.S. Venkatakrishnan nor Anna Cross were participants. Eligible to participate Annual bonus To reward delivery of short-term financial targets and strategic objectives, and the individual performance of the Executive Directors in achieving those. Long Term Incentive Plan (LTIP) award To incentivise execution of Barclays’ strategy over a multi-year period, encourage a long-term view and align Executive Directors’ interest with those of shareholders. All-employee share plans To help increase the number of employee shareholders and increase their participation as shareholders. C.S. Venkatakrishnan up to 93% of Fixed Pay Anna Cross up to 90% of Fixed Pay Performance measures and weightings unchanged from 2023, save for the following: In the Financial measures, a total operating expenses measure replaces cost: income ratio. In the Strategic non- financial measures, the weightings for Customers & clients, Colleagues and Climate & sustainability categories are reduced to 5%. A new Risk & operational excellence category added with a weighting of 10%. C.S. Venkatakrishnan up to 140% of Fixed Pay Anna Cross up to 134% of Fixed Pay Performance weightings and targets for the 2025-2027 LTIP will be determined in early 2025. Eligible to participate Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 203 Remuneration report (continued) Element and purpose Operation 2023 pay outcomes Implementation for 2024 Shareholding requirement To further enhance the alignment of shareholders’ and Executive Directors’ interests in long-term value creation. Risk and conduct adjustment – malus and clawback Malus and clawback provisions discourage excessive risk-taking and inappropriate behaviours. • Executive Directors are required to hold shares with a value equivalent to their maximum annual variable pay opportunity (233% of Fixed Pay for the Group Chief Executive and 224% of Fixed Pay for the Group Finance Director), to be built up within five years from their date of appointment. • Post-employment shareholding requirements apply for two years after stepping down as an Executive Director. The amount to be held is as described above, or if lower the actual number of shares held on the date the Executive Director steps down. • Annual bonus and LTIP awards are subject to malus and clawback provisions. • More detail is set out below. Shareholding requirements remain unchanged As at 31 December 2023: C.S. Venkatakrishnan’s shareholding was 227% of his year-end Fixed Pay (requirement to be met by 31 October 2026) Anna Cross’s shareholding was 118% of her year-end Fixed Pay (requirement to be met by 22 April 2027) Annual bonus and LTIP awards granted in respect of 2023 performance will be subject to malus and clawback provisions Annual bonus and LTIP awards granted in respect of 2024 performance will be subject to malus and clawback provisions Risk and conduct (including malus and clawback) Risk and conduct are taken seriously at Barclays. The Committee ensures there are in-year adjustments, malus or clawback applied to individual remuneration where appropriate. All Executive Director annual bonus and LTIP awards are subject to malus and clawback provisions. The purpose of these provisions is to discourage excessive risk-taking and inappropriate behaviours. The malus provisions enable the Committee to reduce the amount of unvested bonus or LTIP (including to nil) prior to vesting in specified circumstances, including but not limited to: – The individual in question deliberately misleading Barclays, the market and/or shareholders in relation to the financial performance of the Barclays Group – The individual causing harm to Barclays’ reputation or where his/her actions have amounted to misconduct, incompetence or negligence – A material restatement of the financial statements of the Barclays Group or any subsidiary, or the Group or any business unit suffering a material downturn in its financial performance – A material failure of risk management in the Barclays Group – A significant deterioration in the financial health of the Barclays Group. The clawback provisions enable amounts to be recovered after they have vested, for a period in line with applicable regulations – currently seven years from grant (which can be extended to up to 10 years in circumstances where a relevant investigation is ongoing at the end of the initial seven-year period), in circumstance where: – The individual in question’s actions or omissions have amounted to misbehaviour or material error, and/or – Barclays or the relevant business unit has suffered a material failure of risk management. In addition to individual adjustments, the Committee considers and makes collective adjustments to the incentive pool for risk and conduct events. The Committee also adjusts the incentive pool to take account of an assessment of future risks, including conduct, non-financial factors that can support the delivery of a strong risk management, control and conduct culture, and other factors including reputation and impact on customers, markets and other stakeholders. The Committee is supported in its consideration of this by the Board Risk Committee. For 2023, the total impact of risk and conduct-related collective adjustments is a reduction of c.£185m (2022: c.£500m). Discretion In addition to the various operational discretions the Committee can exercise in the performance of its duties (including those discretions set out in the Company’s share plan rules), the Committee reserves the right to make either minor or administrative amendments to the Directors' Remuneration Policy to benefit its operation or to make more material amendments in light of new laws, regulations and/or regulatory guidance. The Committee would only exercise this right if it believed it was in the best interests of the Company, and where it is not possible, practicable or proportionate to seek or await shareholder approval at the next AGM. In relation to the Executive Directors' annual bonus, the Committee has discretion to determine the appropriate performance conditions applying each year – provided that financial factors will normally guide at least 60% of the bonus opportunity. Although the Committee takes a structured approach to considering the level of annual bonus outcome for the Executive Directors each year, any bonus award is discretionary and the Committee has discretion to award any amount from zero to the maximum value. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 204 Remuneration report (continued) In relation to the LTIP, the Committee again has discretion to determine the appropriate performance conditions – provided that financial measures will normally be at least 70% of the total opportunity. In exceptional circumstances the Committee has discretion to amend performance targets, measures or the number of shares under awards, if circumstances occur that cause the Committee to consider such adjustment to be reasonable. The Committee also has the discretion to reduce the vesting of any award, including to nil, if it deems the outcome inconsistent with the performance delivered. For 2023, the Committee did not exercise discretion to adjust the variable pay outcomes as outlined on page 208. Performance measures and targets Measures The performance measures and targets are set annually by the Committee to align with our strategic priorities, ensuring the measures support delivery of the Group’s strategy. The Committee selects financial performance measures that are fundamental to delivery against the Group’s strategy and are considered to be the most important financial measures used by the Executive Directors and the Board to oversee the direction of the business. The non-financial performance measures are chosen to represent key indicators of the success of our strategy, and to provide a balanced view of our performance during the period, which are robustly monitored and reported on to the management team and the Board. Targets Targets for both the annual bonus and LTIP are calibrated to be stretching but achievable, and are aligned with creating value for shareholders and other stakeholders. In respect of the annual bonus, the financial measures and weightings are disclosed at the start of the relevant performance year. The Committee considers the specific annual bonus targets to be commercially sensitive, and that it would be detrimental to disclose the targets at the start of the relevant performance year. On that basis, the targets and performance against those targets are disclosed at the end of the relevant performance year, in that year’s Annual Report on Directors’ remuneration, provided that commercial sensitivity is no longer an issue at that time. In respect of the LTIP, the financial measures, weightings and targets are disclosed in the Remuneration report published immediately before the awards are granted – which is shortly after at the start of the relevant performance period. The Committee selects non-financial performance measures that support the delivery of our strategy and reflect our priorities over the next year or over a multi-year period. ESG and remuneration The Committee reviews the Executive Directors' incentive measures each year to ensure they continue to support the delivery of our strategic priorities, including ESG priorities. The Executive Directors' annual bonus and LTIP have included Climate & sustainability measures for over a decade. The Committee aligns these measures each year with the Group's evolving climate and sustainability ambitions, metrics and targets. Most of our climate-related measures and targets are longer term, including those relating to financing the transition and financed emissions, and progress towards these targets is expected to be variable and non-linear. This is reflected in a higher weighting of Climate & sustainability measures in the LTIP, compared to the annual bonus, as follows: – For the 2024-2026 LTIP, 15% of the total opportunity will be determined based on performance measures relating to Climate & sustainability, measuring progress against each of the three pillars of our climate strategy – including our ambition to be a net zero bank by 2050 and our commitment to align our financing with the goals and timelines of the Paris Climate Agreement. – For the 2024 annual bonus, 5% of the total opportunity will be determined based on Climate & sustainability measures. A further 5% of each of the 2024 bonus and the 2024-2026 LTIP will be determined on Colleagues measures, including diversity, inclusion and engagement. Risk & operational excellence measures are weighted at 10% in the 2024 bonus and 5% in the 2024-2026 LTIP, as the management of risk underpins delivery against our strategy and is a key part of the governance of the Group. Outcomes will be determined based on an assessment of performance against a range of measures of our risk culture, operational precision and controls. In recent years, the weighting of the Climate & sustainability category in both the LTIP and annual bonus was equal, at 10%. As described earlier, for this year's forward-looking incentives the Committee increased the weighting to 15% in the 2024-2026 LTIP and decreased it to 5% in the 2024 annual bonus. Given the higher maximum opportunity under the LTIP compared to the annual bonus, these changes equate to an increase in the total value of remuneration that will be determined based on climate- related measures. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 205 Remuneration report (continued) Illustrative scenarios for Executive Directors' remuneration The charts below show the potential value of the current Executive Directors’ 2024 total remuneration in four scenarios: ‘Minimum’ (i.e. Fixed Pay, pension and benefits), ‘Mid-point’ (i.e. Fixed Pay, pension, benefits and 50% of the maximum variable pay that may be awarded), ‘Maximum’ (i.e. Fixed Pay, pension, benefits and the maximum variable pay that may be awarded) and ‘Maximum with illustrative share price increase applied to LTIP’ (the Maximum scenario, assuming share price appreciation of 50% on the LTIP). Group Chief Executive The value of benefits in these charts is based on an estimated annual value for regular contractual benefits provision during 2024. Additional ad hoc benefits may arise but will always be provided in line with the Directors' Remuneration Policy. A significant proportion of the potential remuneration of the Executive Directors is performance-related, delivered in Barclays shares and subject to deferral, additional holding periods, malus and clawback. These charts assume a constant share price, other than for the share price appreciation applied to the LTIP value in the 'Maximum with illustrative share price increase' scenario. £m Minimum 93% Mid-point 45% Maximum 29% Total: 3.15 7% 3% 2% Maximum with illustrative share price increase applied to LTIP 24% 2% 21% Total: 6.59 31% 28% 23% Total: 10.02 41% 34% Total: 12.08 17% 0 2 4 6 8 10 12 Group Finance Director £m Minimum Total: 1.96 94% Mid-point 46% Maximum 30% 6% Total: 4.02 3% 20% 31% 2% 27% Total: 6.09 41% Maximum with illustrative share price increase applied to LTIP Total: 7.33 25% 1% 23% 34% 17% 0 2 4 6 8 10 12 n Fixed Pay n Pension and benefits n Annual bonus Note: 1 n LTIP n Potential outcome of a 50% share price increase on the LTIP 1 Pension and benefits include the value of cash in lieu of pension and the anticipated value of taxable benefits. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 206 Remuneration report (continued) Alignment with Provision 40 of the UK Corporate Governance Code Code requirements Clarity – remuneration arrangements should be transparent and promote effective engagement with shareholders and the workforce How the Committee has addressed the requirement • A clear remuneration philosophy with aligned policies and practices for Executive Directors and the wider workforce • Our Fair Pay Report, which sets out how pay fairness is central to what we stand for, is used to engage with our shareholders and our colleagues • Regular engagement on remuneration with our largest institutional shareholders Simplicity – remuneration structures should avoid complexity and their rationale and operation should be easy to understand • Clear disclosure of rationale for and operation of each element of the Directors' Remuneration Policy • Executive Directors incentivised via annual bonus with deferral and LTIP • Prospective disclosure of bonus metrics and LTIP targets, and full retrospective disclosure of outcomes against financial and non-financial targets and criteria, with full supporting commentary Risk – remuneration arrangements should ensure reputational and other risks from excessive rewards, and behavioural risks that can arise from target-based incentive plans, are identified and mitigated • Assessment of 'What' and 'How' performance is achieved • Ex-ante and ex-post risk factored into the assessment of business performance • Significant deferral into shares, to align with shareholder experience • Committee discretion to adjust all variable remuneration outcomes • Malus and clawback provisions apply to all elements of variable remuneration Predictability – the range of possible values of rewards to individual Directors and any other limits or discretions should be identified and explained at the time of approving the policy Proportionality – the link between individual awards, the delivery of strategy and the long- term performance of the company should be clear. Outcomes should not reward poor performance • Maximum incentive outcomes set out in the Directors' Remuneration Policy • Scenario charts illustrate potential payouts under each element of the Policy • Key areas of Committee discretion clearly outlined in the Policy • Annual bonus and LTIP measures reviewed each year to maintain alignment to strategic priorities and KPIs • Very significant deferral into shares, to align with shareholder experience • Committee discretion, malus and clawback provisions apply to all elements of variable remuneration, to ensure outcomes do not reward poor performance Alignment to culture – incentive schemes should drive behaviours consistent with company Purpose, Values and strategy • The Committee reviews all policies and practices, including incentive schemes, ensuring alignment to the Group's Purpose, Values, Mindset and conduct expectations • A key aspect of remuneration philosophy is rewarding sustainable performance • Executive Directors' bonus and LTIP based on a balanced scorecard of financial and non- financial measures, with financial measures aligned to external financial targets and non- financial measures aligned to supporting Customers & clients, Colleagues, and to the Group's Climate & sustainability ambitions • Commitment to pay fairness across the workforce • Executive Director remuneration outcomes considered in the context of outcomes across the wider workforce Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 207 Remuneration report (continued) Annual report on Directors’ remuneration This section explains how our Directors’ Remuneration Policy was implemented for 2023 Executive Directors Single total figure for 2023 remuneration (audited) The following table shows a single total figure for 2023 remuneration in respect of qualifying service for each Executive Director, together with comparative figures for 2022. C.S. Venkatakrishnan 2 Anna Cross Notes: 1) Fixed Pay £000 2) Pension £000 3) Taxable benefits £000 Total fixed pay £000 4) Annual bonus £000 5) LTIP £0001 Total variable pay £000 2023 2022 2023 2022 2,860 2,767 1,788 1,185 143 138 89 59 213 343 17 10 3,216 3,248 1,894 1,254 1,425 1,949 879 803 — — — — 1,425 1,949 879 803 Total £000 4,641 5,197 2,773 2,057 1 No LTIP values are shown as neither C.S. Venkatakrishnan nor Anna Cross were participants in the 2020-2022 LTIP or the 2021-2023 LTIP cycle. 2 Anna Cross was appointed to the Board and as Group Finance Director on 23 April 2022. The remuneration shown for 2022 is in respect of her services as Group Finance Director during 2022. Additional information in respect of each element of pay for the Executive Directors (audited) 1) Fixed Pay Fixed Pay is delivered 50% in cash, paid monthly, and 50% in shares, delivered quarterly. The shares are subject to a holding period, with restrictions lifting over five years (20% each year). More information on the Committee's considerations in respect of the Executive Directors' Fixed Pay is set out on page 217. 2) Pension Executive Directors are paid cash in lieu of pension contributions equal to 5% of their Fixed Pay (equivalent to 10% of the cash element of Fixed Pay). The pension cash allowance paid during 2023 was £142,958 for C.S. Venkatakrishnan and £89,375 for Anna Cross. No other benefits were received by Executive Directors from any Barclays' pension plan. 3) Taxable benefits Taxable benefits include private medical cover, life assurance, income protection, tax advice and the use of a Company vehicle and driver when required for business purposes. For C.S. Venkatakrishnan, the benefits figure also includes the cost to the Company of providing him with relocation support during 2023. This is in line with the Directors' Remuneration Policy and includes immigration assistance, home search support in London, and temporary accommodation in London (which ended on 31 October 2023). Those costs came to c.£148,000, including the cost to Barclays of paying the income tax and social security resulting from the provision of that relocation support. As referenced in the 2021 Remuneration report, temporary accommodation in London was provided to him for a period of up to two years, following his appointment in November 2021 as Group Chief Executive. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 208 Remuneration report (continued) 4) 2023 annual bonus The bonus amounts included in the single total remuneration figures are the value awarded or scheduled to be awarded in Q1 following the financial year to which it relates. In determining the bonus in respect of 2023 performance, the Committee considered the performance achieved against the Financial (60% weighting) and Strategic non-financial (25% weighting) performance measures that had been set to reflect Group priorities for 2023. Performance against each Executive Director's Personal objectives (15% weighting) for 2023 was assessed on an individual basis. The outcome for each of the Financial measures was determined on a straight-line basis, between the outcome for threshold performance – which was nil for the profit before tax measure or 20% for the cost: income ratio measure – and 100% for achievement of maximum performance. A summary of the assessment is provided in the following table. 2023 annual bonus outcomes Weighting 50% Threshold £5.8bn Maximum £9.8bn 2023 actual C.S. Venkatakrishnan Anna Cross 1 £7.484bn 21.1% 21.1% Outcome Measures Profit before tax (excluding material items), with CET1 ratio underpin Cost: income ratio (excluding material items) Strategic non-financial 10% 25% 63.5% 59.0% 1 63.1% Performance against strategic measures, organised around three main categories: Customers & clients, Colleagues and Climate & sustainability Personal 15% Individual performance against the respective Executive Director's personal objectives, assessed by the Committee Total Final 2023 annual bonus outcome approved by the Committee Note: 1 Material items excluded from the above measures consist of Q423 structural cost actions of £927m. 2.7% 16.5% 13.0% 53.3% 53.3% 2.7% 16.5% 14.0% 54.3% 54.3% Based on the assessment outlined above, the Committee determined an overall formulaic bonus outcome for C.S. Venkatakrishnan and Anna Cross that equates to £1,425,000, and £879,000 respectively. The Committee reflected on the appropriateness of these outcomes for the 2023 annual bonus, in the context of the performance achieved against the Financial measures, Strategic non- financial measures and Personal objectives. The Committee considered the underlying financial health of the Group, which is strong and well-capitalised, and more holistically the performance and contribution of each Executive Director during 2023. The bonus outcomes were considered in the context of those for the wider workforce – ensuring appropriate alignment both this year and over a multi-year period – and also by comparing to historical outcomes for the Executive Directors in the context of performance each year. The Committee believes that the overall 2023 bonus outcomes above are aligned appropriately with stakeholder considerations and with the performance achieved. Based on this, the Committee concluded that no discretionary adjustment was warranted. In line with the Directors' Remuneration Policy, and due to the regulations prohibiting dividend equivalents being paid on unvested deferred share awards, the number of shares awarded to each Executive Director under the Share Value Plan (the Group's main employee share plan for granting deferred bonus shares to employees) will be calculated using the share price at the date of award, discounted to reflect the absence of dividends or dividend equivalents during the vesting period. The valuation will be aligned to IFRS 2, with the market expectations of dividends during the deferral period being assessed by an independent adviser. The table below details how the 2023 annual bonus award for each Executive Director will be delivered, along with the face value of the 2024-2026 LTIP award that will be granted alongside the deferred elements of the bonus. This shows the percentage that is in Barclays shares for the annual bonus, and also for variable pay overall (the annual bonus and LTIP combined). Of the annual bonus award for C.S. Venkatakrishnan, 86% will be delivered in Barclays shares, and 77% for Anna Cross. Including the 2024-2026 LTIP awards, a total of 96% of C.S. Venkatakrishnan’s 2023 variable pay will be in Barclays shares, and 94% for Anna Cross. Upfront cash bonus £000 Upfront bonus shares £000 Deferred bonus shares £000 Total annual bonus £000 Percentage of bonus in shares 2024-2026 LTIP award £000 Percentage of 2023 variable pay in shares C.S. Venkatakrishnan Anna Cross 200 200 200 200 1,025 479 1,425 879 86 % 77 % 4,025 2,412 96 % 94 % The deferred bonus shares in respect of the 2023 annual bonus awards will vest in two equal tranches on the first and second anniversaries of grant. All shares (both the upfront bonus shares and the deferred bonus shares) are also subject to a one-year holding period from the point of vesting. All of the 2023 variable pay is subject to clawback provisions, which allow the Committee to recover amounts that have been paid in certain circumstances, and the deferred elements are subject to malus provisions, which enable the Committee to delay or reduce the vesting of unvested amounts (including reducing to nil) in certain circumstances. Further detail follows on the assessment of the Strategic non-financial measures, and performance against Personal objectives where applicable. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 209 Remuneration report (continued) Assessment of the Strategic non-financial measures for the 2023 annual bonus The weighting of the Strategic non-financial element was 25%, within which the Customers & clients and Colleagues sections are each weighted at 7.5% and the Climate & sustainability section is weighted at 10%. Progress in relation to each of the Strategic non-financial measures was assessed by the Committee. The overall assessment was based on the following scale: For Climate & sustainability For Customers & clients and (max weighting 10%) Colleagues (max weighting 7.5%) Overall outcome 0% to 1% 1.5% to 3.0% 3.5% to 6.0% 6.5% to 7.5% 0% to 2% 2.5% to 4.5% 5.0% to 7.5% 8% to 10% Behind track on most measures Slightly behind track on most measures On track or slightly ahead of track for most measures Ahead of track on most measures On this basis, the Committee agreed an overall outcome for the Strategic non-financial measures of 16.5% out of a maximum of 25%. The detail supporting this assessment is provided in the table that follows. The measures used in the Strategic non-financial assessment for bonus reflect key strategic priorities of the Group. Most outcomes are either measured by an external provider, such as NPS or Investment Banking fee ranking and share, or are subject to independent ‘limited assurance’ by KPMG (indicated by the 'Δ' 1 symbol) , including Climate & sustainability measures. Customers & clients Measure Criteria Performance Commentary Global Markets revenue ranking and share Maintain client rankings and market share 6th (maintained since 2022) • Global Markets revenue ranking maintained with a slight Revenue share decreased 2 to 6.5% (from 7.3% in 2022 decrease in revenue share amidst a challenging intermediation environment and compressed financing spreads Outcome Slightly behind track • Share of wallet with our Global Markets top 100 clients increased with income up 5%, despite lower client activity in markets across the industry 6th (maintained since 2022) • Maintained sixth ranking despite a year of suppressed On track Investment Banking fee ranking and share Net Promoter Scores (NPS) Improve Fee share maintained 3 at 3.1% Barclays UK: +17 (2022: +11) Barclaycard UK: +13 (2022: +12) US Consumer Bank Digital 5 : 61.3 (2022: 59.8) tNPS Complaints Reduce Barclays UK customer complaints and improve resolution time BUK Total Complaints (% movement year on year): +18% Increase digital engagement Percentage of customer journeys digitally enabled: 80% (2022: 76%) Mobile active customers: 11.0m (2022: 10.5m) CC&P US customer digital 6 (2022: engagement: 76.0% 74.1%) Digital Notes: dealmaking • In the UK, topped the investment banking league table – 4 in fees earned – for the first time in six years • NPS score for Barclays UK increased to +17, up six points. Personal customers with Blue or Premier accounts feel more positive about their experience, but a decline in Business Banking NPS means that improving these relationships is a priority • Barclaycard NPS continued to trend upward • US Consumer Bank Digital tNPS increased with several enhancements made to the customer digital experience, including functionality for replacing lost and stolen cards and the ease of user login On track • Complaint volumes increased during 2023, driven by Behind track specific issues encountered by customers and rising levels of fraud and scams experienced across industry. A rigorous plan is in place to address this and improve our proposition and execution to best-in-class service • 64% of complaints resolved within three days (2022: 61%) • The number of active digital users has surpassed all other 7 UK banks On track • Further improvements made to navigation and functionality within the Barclays app • The US Consumer business continued to invest in the digital servicing model, including the introduction of new and enhanced digital engagement features and technology advancements. Digital active user rate increased versus 2022 Total Customers & clients: 3.5% 1 2023 data subject to independent limited assurance under ISAE (UK) 3000 and ISAE 3410 Current and previous limited assurance scope and opinions can be found within the ESG Resource Hub for further details home.barclays/sustainability/esg-resource-hub/reporting-and-disclosures/ 2 Global Markets rank and revenue share based on Barclays’ calculations using peer-reported financials. Top 10 peer group includes Barclays, Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase & Co, Morgan Stanley, BNP Paribas, Credit Suisse, Deutsche Bank and UBS. Where any of the peer group has not published results by the time we report, we use the consensus estimate for their quarterly performance. 3 Data from Dealogic for the period covering 1 January to 31 December 2023. 4 Data from Dealogic, UK Investment Bank revenue by bank, full year 2023. 5 USCB digital tNPS is a newly tracked metric measuring USCB customer experience at the digital journey level. 6 Excluding Gap customers. 7 The number one for digital users score is from Curinos – eBenchmarkers Analyser and internal analysis, and is from its April 2023 report . Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 210 Remuneration report (continued) Colleagues Measure Criteria Performance Commentary Diversity 33% females at Managing Director and Director level by 2025 Δ 30% in 2023, increasing from 29% in 2022 • Continued to make progress towards 2025 Gender and Underrepresented Race and Ethnicity Ambitions Outcome Slightly behind track • Achieved our Ambition to increase overall underrepresented minority representation by 25% in the UK and 20% in the US two years early. As at the end of 2023, underrepresented minorities represent 5.1% of the total population in the UK and 21% of the total population in the US. Ambition reset to achieve a further 12.5% increase in the UK and 5% increase in the US by the end of 2025 • The number of Managing Directors from underrepresented ethnicities largely unchanged versus 2022 Increase underrepresented 1 minority representation in the UK to 5% and in the US to 21% by 2025 UK: 5.1% (2020 baseline of 4.0%) US: 21.0% (2020 baseline of 18.1%) 55 Managing Directors (2022 baseline of 56) 50% increase in the number of Managing Directors from underrepresented ethnicities in the UK and the US combined by 2025 (measured from 2022 baseline) Inclusion Improve inclusion indicators Engagement Maintain engagement at healthy levels Culture Maintain culture indicators Inclusion Index from Your View survey 83% (2022: 82%) Employee Engagement score from Your View survey 86% (2022: 84%) 86% of employees in Your View survey would recommend Barclays to people they know as a great place to work (2022: 85%) 94% of employees in Your View survey believe that they and their team do a good job of role- modelling the Values every day (2022: 92%) 93% of employees in Your View survey believe that they and their team do a good job of role-modelling our Mindset every day (2022: 92%) • 90% of employees in Your View survey told us they feel On track included in their team (2022: 88%) • 85% of employees in Your View survey told us they believe that senior leaders are truly committed to building a diverse workforce (2022: 84%) • Overall Wellbeing Index score from Your View survey of Ahead of track 88% (2022: 86%) 2 • Highest Engagement and Wellbeing index scores to date • 89% of employees in Your View survey told us that their line managers are supporting their efforts to maintain their wellbeing (2022: 90%) • As part of the culture change programme, Consistently Excellent, the higher operating standard was incorporated into our existing Values and Mindset behaviours and as part of an enhanced set of leadership behaviours Slightly ahead of track • In the first Your View survey where we included questions related to Consistently Excellent, 89% of employees told us that they felt their peers “have a good understanding of what it means to be a consistently excellent organisation” • 83% of employees in Your View survey said they feel “it is safe to speak up at Barclays” (2022: 83%) • 62% of colleagues said it was “simple and straightforward to get things done at Barclays”, a concept in line with one of our key Consistently Excellent focus areas – although this result shows that there is still more to be done in making Barclays more efficient (2022: 60%) Total Colleagues: 5.5% Notes: Δ 2023 data subject to independent limited assurance under ISAE (UK) 3000 and ISAE 3410. Current limited assurance scope and opinions can be found within the ESG Resource Hub: home.barclays/ sustainability/esg-resource-hub/reporting-and-disclosures/ 1 Underrepresented minorities refer to individuals who are Black and Multiracial in the UK, and African American/Black, multiracial, Hispanic/Latinx, Native Alaskan/Native American, or Native Hawaiian/Pacific Islander in the US. 2 On a comparable basis since the current measurement framework has been used (since 2019 for Engagement and since the introduction of the Wellbeing index in 2021). Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 211 Remuneration report (continued) Climate & sustainability Measure Criteria Sustainable and Transition Financing Facilitate $1trn of Sustainable and Transition Financing between 2023 and end of 2030 Performance Δ $67.8bn Reducing our financed emissions Reducing our greenhouse gas (GHG) emissions Renewable electricity Deliver progress on our commitment to align our financing with goals and timelines of the Paris Climate Agreement: 30% reduction in power portfolio emissions intensity (Scope 1) by the end of 2025, from a 2020 baseline 15% reduction in energy portfolio absolute emissions (Scope 1, 2 and 3) by the end 2025, from a 2020 baseline 90% reduction in Scope 1 and 2 GHG emissions (market-based, against a 2018 baseline by end of 2025) 100% renewable electricity sourcing for our global real estate portfolio by end of 2025 Power portfolio emissions Δ intensity: 241 KgCO2e/MWh, 26% down versus 2020 Energy portfolio absolute Δ emissions: 42.5 MtCO2e, 44% down versus 2020 Δ reduction 93% Δ 100% LifeSkills – people upskilled Upskill 8.7 million people from 2023 to end of 2027 with 2.6 million people upskilled in 2023 Δ upskilled in 2023 2.6m LifeSkills – people placed into work Unreasonable Impact (partnership with the Unreasonable Group) Place 250,000 people into work (2023 to the end of 2027) Support an additional 200 businesses solving social and environmental challenges (2023 to the end of 2027) Δ people placed into 53,500 work in 2023 Δ ventures supported 41 Outcome On track Commentary • Progress made towards Barclays' target to facilitate $1trn of Sustainable and Transition Financing between 2023 and end of 2030 • In 2023, developed a Group sustainable finance strategy setting out the strategic focus for the Group in delivering the $1trn target and our Transition Finance Framework, which outlines the criteria for transactions to qualify as transition financing • Ahead of 2025 energy target and broadly on-track for On track 2025 power target • Eight high-emitting sectors now covered by 2030 financed emissions reduction targets, including the three sectors for which new targets are being announced : Aviation, UK Commercial Real Estate and UK Agriculture • Future progress against these targets will be non-linear and may be volatile due to the many external dependencies and variables beyond Barclays’ control that may determine the pace of transition and impact our ability to achieve our targets • Continued to reduce emissions in 2023, having achieved our 90% GHG market-based emissions reduction target for Scope 1 and Scope 2 in 2022 Ahead of track • Continued to source 100% renewable electricity for our 1 global real estate portfolio operations Ahead of track • Maintained focus on improving energy efficiency and replacing fossil-fuel-powered infrastructure with lower- emission alternatives • From 2023, new investment through LifeSkills is focused on targeted support for people in the most underserved communities and underrepresented groups On track • In 2023, the number of people upskilled was in line with our per annum target • Exceeded our per annum target of 50,000 people placed into work in 2023 Slightly ahead of track • After achieving our goal to support 250 ventures by the On track end of 2022, this strategic global partnership with Unreasonable Group was renewed in 2023 to enable Barclays to support an additional 200 entrepreneurs over five years. More than 300 ventures have been supported so far • In 2023, the number of ventures supported met our per annum target Overall strategic non-financial outcome (out of a maximum possible 25%) Total Climate & sustainability: 7.5% 16.5% Notes: Δ 2023 data subject to independent limited assurance under ISAE (UK) 3000 and ISAE 3410. Current limited assurance scope and opinions can be found within the ESG Resource Hub: home.barclays/ sustainability/esg-resource-hub/reporting-and-disclosures/ 1 Global real estate portfolio includes offices, branches, campuses and data centres. Further details on our approach to Key Performance Indicators are included in the Strategic report. Refer to home.barclays/sustainability/esg-resource-hub/ for more information on the ESG measures. + Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 212 Remuneration report (continued) Assessment of performance against the Personal objectives set for the 2023 annual bonus (15% weighting) Individual performance against each of the Executive Directors’ personal objectives for 2023 (15% weighting overall) was assessed by the Committee. Performance for C.S. Venkatakrishnan and Anna Cross was assessed against both the individual objectives set for their respective roles and their shared personal objectives. The table below summarises performance against the shared personal objectives. Shared personal objectives for C.S. Venkatakrishnan and Anna Cross Objective Outcomes Deliver improving shareholder returns, with a focus on RoTE • Excluding Q423 structural cost actions, Group RoTE for 2023 remained aligned with our medium-term target of greater than 10%, for the third consecutive year Maintain robust capital ratios across the Group and within the main operating entities Continue to invest in capabilities to deliver next-generation, digitised consumer financial services Continue to deliver sustainable growth in the Corporate and Investment Bank Actively deploy the range of Barclays’ businesses and capabilities to support customers and clients and capture opportunities as we collectively transition to a low-carbon economy Continue to drive our data strategy and technology agenda across the Group to support improving customer and client services and experience • Group income of £25.4bn, up 3% year-on-year excluding the impact in 2022 of the Over-issuance of Securities, against a challenging macroeconomic backdrop and significant market-wide declines for some business areas • Total shareholder distributions in respect of 2023 equivalent to c.19.4p per share • During 2023 a three-year plan was developed, through to 2026, designed to deliver further value for shareholders and improve operational and financial performance; this is now being implemented • Strong capital position maintained, with Group CET1 of 13.8%, within our target range of 13% to 14% • Similarly strong capital ratios prevail in all main operating entities: at the end of 2023, Barclays Bank PLC’s CET1 ratio was 12.1% and Barclays Bank UK PLC’s CET1 ratio was 14.8%, well in excess of regulatory minimums 1 • Number of active digital users is higher than for any other UK bank • Maintained focus on ensuring that digital banking with Barclays UK is smooth, easy and rewarding by making further improvements to the navigation and functionality within the app and enabling 80% of customer transactions across all Barclays UK channels to be completed digitally • Improvements made to our digital offering for USCB customers helped boost the Android app star rating to 4.7 2 out of 5 in 2023, up from 4 in 2022, and increased our USCB Digital tNPS from 59.8 in 2022 to a full year average of 61.3 in 2023 • Share of wallet with our top 100 Global Markets clients grew, with income from these clients up 5% year on year, despite lower client activity in markets across the industry • Despite a decline in fee income due to the reduced fee pool across the industry, Investment Banking continued to deliver for clients - including leadership in high profile IPOs, e.g. ARM, the largest IPO to price in 2023. 3 Investment Banking maintained its sixth rank globally and improved its ranking in the UK to #1 • Corporate Banking revenues grew off the back of elevated deposits income which continued to benefit from a strong net interest margin, and increased deposit balances with clients • Facilitated $67.8bn of Sustainable and Transition Financing in 2023, against our target to facilitate $1trn by the end of 2030, and published a Transition Finance Framework for Barclays • In support of our Sustainable and Transition Financing target, formed a new Energy Transition Group, comprising our Energy, Power and Sustainable Impact Banking teams • Advised and helped companies raise capital for emerging climate technology, including Nextracker’s IPO and first Follow-on Offering • Continued to develop green and sustainable banking products for business clients, including the new Green Barclayloan and, in partnership with Propel, a reduced fixed rate to business clients who take out finance on environmentally friendly purchases • Extended the Greener Home Reward to 2024, enabling eligible residential mortgage customers to make energy efficiency-related home improvements • Named Best Bank for Environment, Social and Governance (ESG) in the UK for 2023 by Euromoney • Continued to use and enhance data and insights to ensure our strategy, products and services for retail customers deliver the intended outcomes, with a focus on meeting the needs of people with vulnerable characteristics • Barclaycard Payments introduced new digital features – including the launch of Smartpay Anywhere and Smartpay Fuse, enabling small business customers to take online payments as part of a seamless experience • Continued to invest in enhancing our Corporate Banking digital capabilities globally to provide our clients with seamless access to our transaction banking product set Notes: 1 The number one for digital users score is from Curinos – eBenchmarkers Analyser and internal analysis, and is from its April 2023 report. 2 A newly tracked metric for USCB measuring customer experience at digital journey level. 3 Data from Dealogic, global data based on full-year 2023, UK data based on full-year 2023 UK Investment Bank revenue by bank. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 213 Remuneration report (continued) In addition to the shared personal objectives described above, the table below summarises performance against the personal objectives for C.S. Venkatakrishnan. Personal objectives for C.S. Venkatakrishnan Objective Outcomes Ensure a continued focus on customer and client outcomes Continue to embed the Mindset across the organisation in support of our Purpose Continue to develop a high- performing culture in line with our Values, with a focus on employee engagement, succession planning, talent and diversity Effectively manage relationships with key external stakeholders, including societal stewardship Drive leadership accountability to further strengthen our risk management and controls culture • Continued to transform our physical support model in 2023, including by expanding Barclays Local (the largest network of alternative branch formats in the UK, for Barclays UK customers who need in-person support) by more than 159 new sites, to a total of 351 sites, as well as continuing to provide services through innovative new Shared Banking Hubs • Broadened the Group’s UK mortgages proposition through the acquisition of Kensington Mortgage Company, the UK’s leading residential specialist mortgage lender, known for its support of specialist customer groups and the intermediary market • Engaged extensively with customers to get regular insights to inform our design principles and the transformation of our customer journeys, including 1.4 million pieces of customer feedback obtained in Barclays UK in 2023 • Some progress made in addressing the volume of Barclays UK customer complaints with more work to do to improve the overall customer experience and address and remove the root causes of customer complaints • Successfully completed the transfer of UK Wealth Management & Investments business to sit alongside the Private Bank, with the transition of 300,000 clients and 1,000 colleagues • • Improved support to financially vulnerable customers by enhancing tools, training, support and systems Increased the number of colleagues who believe that they and their team do a good job of role modelling our Mindset every day (2023: 93%; 2022: 92%; 2021: 89%) • Continued the design, delivery and embedment of the Group-wide cultural change programme, Consistently Excellent, which challenges colleagues to address five key areas – Precision, Service, Focus, Efficiency and Diversity of Thought – and ensured delivery to this standard is incorporated into our key processes for attracting, retaining and developing talent, planning for succession, and recognising and rewarding performance • Colleague engagement increased across the Group to 86%, an increase of 2% points versus 2022, with the annual Your View survey also showing positive results across most other measures • Inclusion Index score for 2023 was 83%, continuing its upward trajectory since it was launched in 2020, with 90% of colleagues telling us that they feel included in their team • Continued to make progress towards our 2025 Gender and Underrepresented Race and Ethnicity Ambitions, increasing senior female representation globally and representation of underrepresented minority groups in the UK and the US • Venkat has built strong connections and proactively collaborated with UK and US regulators throughout the year, working to support the broader UK economy • In 2023, our societal programmes reached more than 3.27 million people around the world, helping to unlock the skills and employment opportunities people need to progress • Continued the design, delivery and embedment of the Group-wide cultural change programme, Consistently Excellent, which includes a focus on risk awareness and operational excellence • Consistently Excellent workshops have been delivered to senior leaders during 2023, and in 2024 all other colleagues will be invited to attend, to ensure that there is a common understanding of what it means to deliver to a consistently excellent standard • Progress in embedding the new operating standard with colleagues has been reflected in the results from the Autumn 2023 Your View survey, where 89% of colleagues felt their peers “have a good understanding of what it means to be a consistently excellent organisation” Recognising C.S. Venkatakrishnan's very strong performance against both his individual and shared personal objectives, and his leadership of the organisation through 2023 – including the embedment of a new operating standard, Consistently Excellent – the Committee assessed that an outcome of 13% out of a maximum of 15% was appropriate. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 214 Remuneration report (continued) The table below summarises performance against the personal objectives for Anna Cross. Personal objectives for Anna Cross Objective Outcomes Support the business to grow sustainably, in line with the Group’s strategy, with specific focus on climate, capital and costs • Maintained cost discipline. Excluding the Q423 structural cost actions in 2023 and the impact in 2022 of the Over-issuance of Securities, the 2023 cost: income ratio was 63%, as the Group delivered positive cost: income jaws of 1% • Strong capital position maintained, with Group CET1 of 13.8% at the end of 2023, balanced with delivering total cash returns to shareholders and investment in the business • Instrumental in defining the future strategic priorities in the lead up to the Investor Update • Leveraged technology to enhance the delivery of financial management reporting, including Group Balance Sheet reporting and Internal Reporting, increasing efficiency and automation • The Basel IV programme is on track to be completed in required timeframes • Continued improvements in Liquidity Reporting Infrastructure, including migration of additional reporting onto core architecture, resulting in improved controls • Progress made in the strategic transformation of Asset and Liability Management and Hedge Accounting infrastructure to improve precision in our operations, risk management and controls • Control Environment and Management Control Approach overall rated satisfactory in 2023 • High level of colleague engagement across Finance, at 85% (2022: 85%) • Continued focus on embedding the Barclays Mindset with high scores on all three indices: Empower at 87% (2022:89%); Challenge at 84% (2022:85%); and Drive at 88% (2022:87%) • Senior female representation increased to 34% in Group Finance with half the roles on the Finance Management Team occupied by females as at the end of 2023 • Established effective and open relationships with regulators and the investment community Continue to optimise financial management reporting (particularly through technology) to drive benefits across the Group and to ensure a smooth transition to new rules and regulations Continue to progress the transformation of the Treasury function, including strategic treasury and liquidity platforms Oversee the effective management of the risk and controls agenda across Group Finance, and transform for the future where necessary Retain focus on the colleague agenda across Group Finance – driving employee engagement, continuing to improve diversity, developing senior talent and succession planning Effectively manage relationships with key external stakeholders including regulators and investors In addition to the personal objectives set for Anna Cross at the start of 2023, at times during the year she carried out some responsibilities (both internally and externally) that are usually performed by the Group Chief Executive, due to his illness. The Committee recognised the high level of achievement during 2023 against these objectives, and also the additional responsibility taken on at times due to the Group Chief Executive's illness, as outlined in the table above. Based on Anna Cross's strong performance against both her individual and shared personal objectives, and her strong leadership through 2023, the Committee assessed that an outcome of 14% out of a maximum of 15% was appropriate. 5) Vesting of the 2021-2023 LTIP cycle for the current Executive Directors No LTIP awards were granted to C.S. Venkatakrishnan and Anna Cross in 2021 as they were not Executive Directors at that time. Vesting of the 2021-2023 LTIP cycle for other participants Former Group Finance Director Tushar Morzaria is the only remaining participant in the 2021-2023 LTIP cycle, having been granted an award in March 2021 while he still served as an Executive Director. The Committee assessed performance against the performance conditions for that LTIP award, based on performance over the period from 1 January 2021 to 31 December 2023, with straight-line vesting applied between the threshold and maximum targets shown for the financial measures. The Committee determined that 53.2% of the award will vest, as detailed in the table that follows. Before finalising the vesting, the Committee considered whether this outcome was appropriate in the context of the performance achieved, and concluded that it was – and that no further discretionary adjustment was warranted. The vesting portion of the award will be released in five equal annual tranches, starting from March 2024. After release, each tranche of shares is subject to an additional 12-month holding period. The value that Tushar Morzaria is expected to receive from the vesting of this award is £1,174,634, estimated (as this 2023 Annual Report will be finalised prior to the vesting date) using the Q4 2023 average share price of £1.4374 (which includes 18% share price depreciation since the date of grant). The performance achieved against the performance targets is shown in the table that follows. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 215 Remuneration report (continued) 2021-2023 LTIP outcomes Performance measure Weighting Threshold Maximum vesting Actual % of award vesting 2023 return on tangible equity (RoTE) (excluding material items) 1, 2 25% 0% of award vests for RoTE of 6.0%, rising on a straight-line basis 25% of award vests for RoTE of 12.0% 10.8 % 20.0 % Average cost: income ratio 3 (excluding material items) 10% Maintain CET 1 ratio within the target range 10% Relative total shareholder 5 return Risk scorecard Climate 25% 10% 10% 10% of award vests for average cost: income ratio of 62.0% 64.1 % 3.0 % CET1 ratio between 180bps and 280bps above MDA hurdle throughout the period, or CET1 ratio more than 280bps above MDA hurdle but making progress towards the target range during the period Within range 10.0 % 0% of award vests for average cost: income ratio of 65.0%, rising on a straight-line basis 4 If CET1 is below MDA hurdle +180bps during the period, the Committee will consider what portion of this element should vest, based on the causes of the CET1 reduction If CET1 is above MDA hurdle +280bps but does not make progress towards the range over the period, the Committee will consider what portion of this element should vest, based on the reasons for the elevated levels of CET1 versus target range and the associated impacts 25% of award vests for performance at or above the upper quartile 6.25% of award vests for performance 6 at median of the peer group , rising on a straight-line basis The Risk scorecard captures a range of risks and reflects the considerations within the incentive risk alignment framework shared with regulators. The current framework measures performance against three broad categories – Capital & liquidity, Control environment and Conduct – using a combination of quantitative and qualitative metrics Below median Performance is measured on progress towards our ambition to be a net zero bank by 2050 including: • our commitment to align our financing with the goals of the Paris Climate Agreement • our commitment to facilitate £100bn of green financing by 2030 The Committee determined the percentage of the award that may vest between 0% and 10% Strategic non-financial 10% Performance is measured against the Strategic non-financial measures. The Committee determined the percentage of award that may vest between 0% and 10%. The measures are organised around three categories: Customers & clients, Colleagues, and Society (Citizenship). Each of the three main categories has equal weighting Total Final 2021-2023 LTIP vesting outcome approved by the Committee Notes: 1 Using average tangible shareholders’ equity based on a CET1 ratio of 13.5%. 2 Material items consist of Q423 post-tax structural cost actions (2023: £739m). 3 Material items consist of certain structural cost actions (2023: £927m taken in Q423; 2022: £151m, 2021: £648m). The litigation and conduct impacts from the Over-issuance of Securities and the devices settlements are not excluded. 4 Currently 12%. 5 Performance assessed over the period from 1 January 2021 to 31 December 2023. Start and end total shareholder return data is the Q4 average for 2020 and 2023 respectively and is measured in GBP for each company. 6 The peer group is comprised of banks in Europe and North America of comparable size to Barclays and whose weekly returns have a high degree of correlation with Barclays'. The peer group for the 2021-2023 LTIP award was Banco Santander, Bank of America, BBVA, BNP Paribas, Citigroup, Credit Agricole, Credit Suisse, Deutsche Bank, HSBC, ING Group, Lloyds Banking Group, Morgan Stanley, NatWest Group, Societe Generale, Standard Chartered, UBS, and UniCredit. 0.0 % 6.0 % 7.5 % 6.7 % 53.2 % 53.2% Average return on tangible equity (RoTE) (excluding 1 material items) Average cost: income ratio (excluding material items) Maintain CET 1 ratio within the 2 target range Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 216 Remuneration report (continued) LTIP awards granted during 2023 Awards were granted to C.S. Venkatakrishnan and Anna Cross on 8 March 2023 under the 2023-2025 LTIP, based on a value per share of £1.32067, which was derived from the share price less a discount to reflect the absence of dividends or equivalents during the vesting period, in accordance with the Directors' Remuneration Policy. This is the value used to calculate the number of shares below. Performance period Face value at grant Number of shares % of Fixed Pay C.S. Venkatakrishnan Anna Cross 140 % 134 % 2,946,989 1,750,247 £3,892,000 £2,311,499 2023-2025 2023-2025 The performance measures for the 2023-2025 LTIP awards are as follows: Performance measure Weighting Threshold 25% 0% of award vests for RoTE of 8.0%, rising on a straight-line basis Maximum vesting 25% of award vests for RoTE of 12.5% or higher 10% 10% 0% of award vests for average cost: income ratio of 62.5%, rising on a straight-line basis 10% of award vests for average cost: income ratio of 58.0% or lower If CET1 is below the target range during the period, the Committee will consider what portion of this element should vest, based on the reasons for the CET1 shortfall 10% vests if either: • CET1 is within the range during the period Relative total shareholder 3 return Strategic non-financial 25% 20% Risk scorecard 10% If CET1 is above the range and does not make progress towards the range over the period, the Committee will consider what portion of the element should vest, based on the reasons for the elevated levels of CET1 versus target range and the associated impacts 4 6.25% vests for performance at the median of the peer group , rising on a straight-line basis or • CET1 is above but making progress towards the target range 25% of award vests for performance at or 4 upper quartile above the peer group The evaluation will focus on key performance measures, with a detailed retrospective narrative on progress against each category throughout the period. Performance against the strategic non-financial measures will be assessed by the Committee to determine the percentage of the award that may vest between 0% and 20%. The measures are organised around three main categories and measures will likely include, but not be limited to, the following: Climate & sustainability (weighted 10%) – progress to be measured against four key objectives: progress towards our Sustainable and Transition Financing target; reduce our financed emissions; reduce our operational emissions; and support our communities Customers & clients (weighted 5%) – drive world-class outcomes for customers and clients; Improve Net Promoter Scores; reduce Barclays UK customer complaints and improve resolution time; maintain client rankings and market share within CIB; and increase digital engagement Colleagues (weighted 5%) – protect and strengthen our culture through our Purpose, Values and Mindset; Continue to improve diversity in leadership roles; improve inclusion indicators; maintain engagement at healthy levels; and maintain culture and conduct indicators The Risk scorecard captures a range of risks and reflects the considerations within the incentive risk alignment framework shared with regulators. The current framework measures performance against three broad categories – Capital & liquidity, Control environment and Conduct – using a combination of quantitative and qualitative metrics. The framework may be updated from time to time in line with the Group’s risk strategy. Specific targets within each of the categories are deemed to be commercially sensitive. Retrospective narrative on performance will be disclosed in the 2025 Remuneration report, subject to commercial sensitivity no longer remaining Notes: 1 Using average tangible shareholders’ equity based on a CET1 ratio at the mid-point of the Group target range 13% to 14%. 2 Currently 13.8%. 3 Performance assessed over the period from 1 January 2023 to 31 December 2025. Start and end total shareholder return data will be the Q4 average for 2022 and 2025 respectively and will be measured in GBP for each company. 4 The peer group is comprised of banks in the UK, Europe and North America of comparable size to Barclays and whose weekly returns have a high degree of correlation with Barclays’. The peer group for the 2023–2025 LTIP award is: Banco Santander, Bank of America, BBVA, BNP Paribas, Citigroup, Credit Agricole, Credit Suisse, Deutsche Bank, HSBC, ING Group, Lloyds Banking Group, Morgan Stanley, NatWest Group, Societe Generale, Standard Chartered, UBS, and UniCredit. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 217 Remuneration report (continued) Executive Directors: Statement of implementation of remuneration policy in 2024 An overview of how the Directors' Remuneration Policy will be implemented in 2024 is provided alongside the summary of the policy on page 201. 2024 Fixed Pay and market competitiveness of the Executive Directors’ total compensation opportunity Pay benchmarking data is used as a reference point to ensure that the total compensation opportunity provided to the Executive Directors is appropriately positioned compared to other similar large and complex international banks. Comparing the Executive Directors' pay solely with other UK-listed banks would not recognise the Group's global footprint and diversified universal banking model, which includes significant corporate banking, investment banking and global markets businesses. The international banking peer group used by the Committee when considering the Executive Directors' pay therefore includes other large universal banks from continental Europe, and the large US universal and investment banks. Around half of the peer group are US- based, as these are among the most relevant comparators given their business mix and also form part of the peer group used internally when comparing the Group's performance. Barclays actively competes with those US-based peers for talent, which is reflected in several current and former Executive Directors having been recruited into Barclays from those firms. The Committee also recognises that some of those peers are larger than Barclays, and that market pay levels for executive directors of US companies are often higher than those of UK companies. To help maintain balance, the international banking peer group also includes the larger UK-listed banks most comparable to Barclays. An annual review of the Executive Directors' Fixed Pay, in the same way and at the same time as for the wider workforce, is a feature of the Directors' Remuneration Policy approved by shareholders in 2023. In February 2024 the Committee reviewed the Fixed Pay for each Executive Director as part of the year-end pay review process for colleagues across the Group. The Committee considered the maximum total compensation opportunity of each Executive Director, driven by their respective levels of Fixed Pay, and noted that in each case the total compensation opportunity is materially less than the median of that offered for comparable roles in our international banking peer group. The Committee considered this relative market positioning in the context of the robust performance and significant personal contribution made by each of the Executive Directors, and determined that Fixed Pay would be increased by 2.5% for both C.S. Venkatakrishnan and Anna Cross – to £2,947,000 and £1,845,000 respectively, effective 1 March 2024. The Committee noted that these are lower percentage increases than the average fixed pay increase for the wider workforce, and in particular for UK employees within the scope of the 2024 UK pay deal with the union Unite – with a 5.55% budget for salary increases for junior UK employees and a 3.75% budget for other union-recognised employees. To align the Executive Directors' interests with those of shareholders, half of Fixed Pay for each Executive Director is delivered in shares, which are granted quarterly and released in instalments over five years. The other half of their Fixed Pay is delivered in cash, paid monthly via payroll in the same way as salary for other employees. The following charts compare each Executive Director's maximum total compensation opportunity for 2024 against the equivalent opportunity across international banking peers. This shows that, even after these Fixed Pay increases, the maximum total compensation opportunity is significantly behind international banking peers, falling between the market lower quartile and median for C.S. Venkatakrishnan and slightly below lower quartile for Anna Cross. The charts also show a comparison of the maximum total compensation opportunity of each Executive Director with the equivalent roles at the companies that make up the FTSE 30 (i.e. the 30 largest FTSE 100 constituents by market capitalisation). This shows that the Executive Directors’ maximum total compensation opportunity is more competitive, but not inappropriate, compared to the FTSE 30 group. The Committee noted that it would be unlikely for the Group to fill either of the Executive Director roles by recruiting from the other FTSE 30 companies, recognising the necessity for candidates for these roles to have the right breadth and depth of banking knowledge and experience – particularly given Barclays’ mix of businesses, as outlined above. However, this comparison is provided alongside the international banking peer group to provide additional UK context. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 218 Remuneration report (continued) Executive Director maximum total compensation opportunity relative to market benchmarks Group Chief Executive C.S. Venkatakrishnan International banking peer group Group Finance Director Anna Cross International banking peer group FTSE 30 FTSE 30 n Bottom quartile n 3rd quartile n 2nd quartile n Top quartile Positioning of maximum total compensation opportunity at Barclays relative to market benchmarks Notes • Barclays and market benchmark data reflect maximum total compensation opportunity, excluding pensions and benefits. • Benchmark data for the international banking peer group and FTSE 30 was provided by Willis Towers Watson, based on publicly disclosed data in respect of each company's 2022 or 2022/23 financial years, incorporating assumptions where companies do not disclose a maximum total compensation opportunity. • Barclays’ international banking peer group currently comprises the following international banks: Bank of America, BNP Paribas, Citigroup, Deutsche Bank, Goldman Sachs, HSBC Holdings, JPMorgan Chase & Co, Lloyds Banking Group, Morgan Stanley, Standard Chartered, and UBS Group. 2024 annual bonus performance measures Performance measures with appropriately stretching targets were selected to cover a range of financial and non-financial goals that support the key strategic objectives of the Group. For the 2024 annual bonus, slight amendments were made to the performance measures compared to the 2023 annual bonus: – Within the Financial measures, total operating expenses replaces cost: income ratio, reflecting the continued importance of cost discipline while providing a more focused and simpler measure of cost control within the year. – Within the Strategic non-financial measures, the weightings for the Customers & clients and Colleagues categories are each reduced from 7.5% to 5%, and the weighting for the Climate & sustainability category is reduced from 10% to 5%. Those reductions accommodate the introduction of a Risk & operational excellence measure, weighted at 10% – reflecting the focus on risk, control and operational excellence. The other measures were largely unchanged. Performance measures and weightings are shown below: Performance measure Weighting Metrics Financial measures Profit before tax (excluding 1 material items) 50% Total operating expenses at specific FX (excluding material 1 items) 10% Strategic non-financial measures A performance target range has been set for this financial measure, which will be disclosed in the next Remuneration report. Pay-out of this element will also depend on the CET1 ratio at the end of the performance year. In line with regulatory requirements, if the CET1 ratio is below the MDA hurdle at the end of the performance year, the Committee will consider what part if any of this element should pay out. A performance target range has been set for this financial measure, which will be disclosed in the next Remuneration report. The measure is tied to a specific USD:GBP exchange rate to minimise the impact of FX volatility. The evaluation will focus on a range of key metrics, with a detailed retrospective narrative on progress against each during the year. Performance against the measures will be assessed by the Committee to determine the percentage of the award that may vest between 0% and 25%. The measures are organised around four main categories and measures will likely include the following: Climate & sustainability 5% Progress to be measured against four key objectives: • Progress towards our Sustainable and Transition Financing target • Reduce our financed emissions • Reduce our operational emissions • Support our communities Customers & clients 5% Drive world-class outcomes for customers and clients: • Improve Net Promoter Scores • Reduce Barclays UK customer complaints and improve resolution time • Maintain rankings and market share within Barclays Investment Bank • Increase digital engagement Note 1 Material items are defined as those large atypical one-offs that are called out in the financial reporting. As in previous years, the exclusion is not automatic, and the Committee will determine whether each item should be treated as material for these purposes at the time that outcomes are determined. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 219 Remuneration report (continued) Performance measure Weighting Metrics Colleagues 5% Protect and strengthen our culture through our Purpose, Values and Mindset: • Continue to improve diversity in leadership positions • Improve inclusion indicators • Maintain engagement at healthy levels • Maintain culture indicators Risk & operational excellence 10% Support a consistently excellent operating standard, risk management and controls Performance measured against two categories – Operational excellence and Risk & conduct – using a combination of quantitative and qualitative metrics Personal objectives Personal objectives 15% Joint personal objectives: • Deliver new financial targets including RoTE and capital distributions • Maintain robust capital ratios across the Group and within the main operating entities • Continue to simplify the organisation in terms of its operations and financial reporting • Deliver better customer outcomes, income quality and investment priorities across our businesses • Demonstrate progress towards reallocating capital to the highest returning businesses • Continue to drive the sustainability strategy of the bank to achieve our ambition to be a net zero bank by 2050 C.S. Venkatakrishnan: • Continued focus on customer and client outcomes • Drive delivery to a consistently excellent standard • Continue to develop a high-performing culture in line with our Values and Mindset, with a focus on employee engagement, succession planning, talent and diversity • Effectively manage relationships with key external stakeholders • Drive leadership accountability to further strengthen our risk management and controls culture Anna Cross: • Continue to simplify, standardise and automate Finance and Treasury processes to improve effectiveness and efficiency • Appropriate management of capital and resources using oversight committees to ensure we comply with governance and regulatory requirements • Effectively manage relationships with key external stakeholders, including regulators and investors • Oversee the effective management of the risk and control across Group Finance, ensuring we take full ownership of our end-to-end processes • Retain focus on the colleague agenda across Group Finance - driving employee engagement, continuing to improve diversity & inclusion, developing senior talent and succession 2024-2026 LTIP awards and performance measures The Committee decided to grant awards under the 2024-2026 LTIP cycle to C.S. Venkatakrishnan and Anna Cross with face values at grant equal to 140% and 134% of Fixed Pay respectively – which will be based on Fixed Pay before applying the 1 March 2024 increases outlined earlier in this Remuneration report. Those maximum award multiples are in line with those for 2023. These share-based awards ensure alignment with future performance over the three-year assessment period, as well as share price alignment over the long release period (up to eight years from initial date of grant). For the 2024-2026 LTIP, changes were made to the financial and non-financial performance measures, compared to the 2023-2025 LTIP cycle granted early in 2023. Within the Financial measures, the weighting of RoTE was increased slightly, from 25% to 30%, given that improving RoTE is a key part of the Group's priorities and revised targets, as set out in the 'Our strategy' section from page 11. This was accommodated via a small reduction to the weighting of relative total shareholder return from 25% to 20%. The RoTE measure is based on RoTE performance achieved in 2026, aligned with the Group's revised targets. This is underpinned by a requirement based on average RoTE across the performance period, to ensure an appropriate level of RoTE is maintained throughout. Within the Strategic non-financial measures, the Climate & sustainability weighting is increased from 10% to 15%. To accommodate this, the weighting of the risk-related measure – which this year also incorporates assessment of operational excellence – is reduced from 10% to 5%. The other measures are largely unchanged. The Group's Climate & sustainability targets are longer term, through to 2050, and progress towards these targets is expected to be variable and non-linear – hence the increased weighting of Climate & sustainability in the 2024-2026 LTIP and reduced weighting in the 2024 annual bonus. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 220 Remuneration report (continued) The 2024-2026 LTIP award will be subject to the following forward-looking performance measures. Performance measure Weighting Threshold Maximum vesting Financial measures 2026 RoTE, with an underpin based on average RoTE over the performance period (RoTE excluding material items in 1 each case) Average cost: income ratio 1 (excluding material items) Maintain CET1 ratio within the 2 target range 10% 10% 30% 6% of award vests for 2026 RoTE of 10.0%, rising on a straight-line basis 30% of award vests for 2026 RoTE of 14.0% or higher This element is also subject to an underpinning requirement that average RoTE over the performance period is at least 10%. If average RoTE over the period is less than 10%, the Committee will consider the reasons why and determine what portion of this element of the LTIP award should vest, if any 0% of award vests for average cost: income ratio of 62.5%, rising on a straight-line basis 10% of award vests for average cost: income ratio of 58.0% or lower If CET1 is below the target range during the period, the Committee will consider what portion of this element should vest, based on the reasons for the CET1 shortfall If CET1 is above the range and does not make progress towards the range over the period, the Committee will consider what portion of the element should vest, based on the reasons for the elevated levels of CET1 versus target range and the associated impacts 10% vests if either: • CET1 is within the range during the period or • CET1 is above but making progress towards the target range Relative total shareholder 3 return Strategic non-financial measures 20% 5% vests for performance at the median of the 4 , rising on a straight-line basis peer group 20% of award vests for performance at or above 4 upper quartile the peer group The evaluation will focus on a range of key metrics, with a detailed retrospective narrative on progress against each during the year. Performance against the measures will be assessed by the Committee to determine the percentage of the award that may vest between 0% and 30%. The measures are organised around four main categories and measures will likely include the following: Climate & sustainability 15% Customers & clients Colleagues 5% 5% Progress to be measured against four key objectives: Progress towards our Sustainable and Transition Financing target; reduce our financed emissions; reduce our operational emissions; and support our communities Drive world class outcomes for customers and clients: Improve Net Promoter Scores; reduce Barclays UK customer complaints and improve resolution time; maintain client rankings and market share within Barclays Investment Bank; and increase digital engagement Protect and strengthen our culture through our Purpose, Values and Mindset: Continue to improve diversity in leadership roles; improve inclusion indicators; maintain engagement at healthy levels; and maintain culture indicators Risk & operational excellence 5% Support a consistently excellent operating standard, risk management and controls: Performance measured against two categories – Operational excellence and Risk & conduct – using a combination of quantitative and qualitative metrics Notes 1 Material items are defined as those large atypical one-offs that are called out in the financial reporting. The exclusion is not automatic, and the Committee will determine whether each item should be treated as material for these purposes at the time that outcomes are determined. 2 Currently 13-14%. 3 Performance assessed over the period from 1 January 2024 to 31 December 2026. Start and end total shareholder return will be the Q4 average for 2023 and 2026 respectively and will be measured in GBP for each company. 4 The peer group is comprised of banks in the UK, Europe and North America of comparable size to Barclays and whose weekly returns have a high degree of correlation with Barclays. The peer group for the 2024-2026 LTIP award is Banco Santander, Bank of America, BBVA, BNP Paribas, Citigroup, Credit Agricole, Deutsche Bank, HSBC, ING Group, Lloyds Banking Group, Morgan Stanley, NatWest Group, Societe Generale, Standard Chartered, UBS, and Unicredit. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 221 Remuneration report (continued) Additional remuneration disclosures Group performance graph and Group Chief Executive remuneration The performance graph below compares the total shareholder return of Barclays shares with the total shareholder return of the FTSE 100 index over the 10 years ended 31 December 2023. The FTSE 100 index has been selected because it represents a cross-section of leading UK companies, of which Barclays is a long-standing constituent. Total shareholder return – rebased to 100 in 2013 Year ended 31 December Year 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Antony Jenkins Antony Jenkins John McFarlane Jes Staley Jes Staley1 Jes Staley1 Jes Staley1 Jes Staley1 Jes Staley1 Jes Staley2 C.S. Venkata- krishnan3 C.S. Venkata- krishnan C.S. Venkata- krishnan 5,467 3,399 305 277 4,233 3,873 3,362 5,929 4,220 2,121 866 5,197 4,641 57.0% 48.0% n/a n/a 60.0% 48.5% 48.3% 75.0% 38.6% 2 n/a 92.6% 75.4% 53.3% 30.0% 39.0% 4 n/a 4 n/a 4 n/a 4 n/a 4 n/a 48.5% 23.0% 2 n/a 4 n/a 4 n/a 4 n/a Group Chief Executive Single total remuneration figure for Group Chief Executive Annual bonus award as a % of maximum Long-term incentive plan vesting as a % of maximum Notes: 1 Jes Staley's remuneration figures for performance years 2016 to 2020 reflect the single total figures of remuneration as disclosed at the time. These have not been restated for the decision made by the Committee during 2023 that Jes Staley's unvested bonus and LTIP awards should be forfeited, as outlined earlier in this Remuneration report. 2 Jes Staley stepped down as Group Chief Executive on 31 October 2021. The remuneration shown for 2021 is in respect of his services as an Executive Director between 1January 2021 and 31 October 2021. This figure does not include variable remuneration as the Committee determined that Jes Staley should be ineligible for 2021 bonus and should forfeit his unvested LTIP awards. 3 The 2021 remuneration shown is in respect of C.S. Venkatakrishnan's services during 2021 following his appointment as Group Chief Executive on 1 November 2021. 4 Not applicable as the individual was not a participant in a long-term incentive cycle that vested in the period. 1009285898262786382727310010199118133121142126149155167BarclaysFTSE 10020132014201520162017201820192020202120222023Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 222 Remuneration report (continued) Group Chief Executive pay ratios The table below shows, for each year since 2019, the ratios of the Group Chief Executive’s total remuneration to the total remuneration of UK employees. The change in these pay ratios for 2023 is explained below the table. 2023 2022 1 2 2 2021 2020 2019 Notes: Option 25th percentile Median 75th percentile A A A A A 122 x 154 x 95 x 144 x 213 x 83 x 101 x 62 x 95 x 140 x 49 x 58 x 35 x 53 x 77 x 1 2021 pay ratios reflect the sum of the 2021 single total figures for remuneration for C.S. Venkatakrishnan and Jes Staley, for their respective periods of service as Group Chief Executive in 2021. Jes Staley was ineligible for an annual bonus in respect of 2021 after he stepped down as Group Chief Executive. 2 The 2020 and 2019 ratios reflect the disclosed 2020 and 2019 single total figures for remuneration for Jes Staley and have not been restated for the decision made by the Committee in 2023 that Jes Staley's unvested bonus and LTIP awards should be forfeited, as outlined earlier in the report. The Directors' Remuneration Report regulations provide three options that companies may use to calculate total pay for the employees at the 25th percentile, median and 75th percentile. Option A was selected as this is the most robust methodology, calculating total pay for all employees on the same basis that the single total figure for remuneration is calculated for Executive Directors. Total pay for each employee includes earned fixed pay, which is made up of salary, any role-based pay and relevant allowances, annual incentives awarded for the 2023 calendar year, and an estimate of pension and benefits for 2023 (based on what new UK hires at each corporate grade currently receive). Other elements of pay such as overtime and shift allowances have been excluded. Calculations use full-time equivalent pay data taken from our HR systems for all UK employees, for each year using the employee population on 31 December 2023. Total pay and fixed pay for the UK employees at the 25th percentile, median and 75th percentile are set out in the table below. 2023 2022 2021 2020 2019 25th percentile Median 75th percentile Total pay Fixed pay Total pay Fixed pay Total pay Fixed pay £38,194 £31,897 £55,801 £45,230 £95,341 £75,583 £33,711 £31,404 £29,380 £27,875 £28,300 £26,035 £24,706 £23,348 £51,493 £48,253 £44,631 £42,362 £41,608 £39,461 £37,460 £35,158 £89,911 £85,407 £79,324 £77,488 £71,071 £67,408 £64,272 £62,263 The Group Chief Executive pay ratios for 2023 are lower than those for 2022, primarily driven by the lower 2023 annual bonus for C.S. Venkatakrishnan as outlined in the 2023 annual bonus outcomes section of this Remuneration report. Higher-than-normal employee salary increases in early 2023 as part of that year’s UK pay deal, which were weighted towards more-junior employees, also contributed to the lower pay ratios for 2023. Barclays' remuneration philosophy is set out earlier in this report, and all remuneration decisions for the Executive Directors and the wider workforce are made within this framework. The Group Chief Executive pay ratios are the outcomes of all of these decisions, which are explained in more detail in the Committee Chair’s annual statement. To ensure Executive Director remuneration outcomes are commensurate with those of the wider workforce, each year, when considering whether a discretionary adjustment should be made to the Executive Directors’ incentive outcomes, the Committee specifically considers whether the bonus and LTIP outcomes for the Executive Directors appropriately reflect the Group’s performance and the remuneration outcomes for the wider workforce. It should be noted that the ratios for 2024 are expected to increase, all other things being equal, as it will be the first year in which C.S. Venkatakrishnan is a participant in the LTIP cycle due to vest and be included in the single total figure for remuneration. C.S. Venkatakrishnan’s single total remuneration figure for 2023 does not include any LTIP value as he was not an Executive Director at 3 . the time of the relevant LTIP grant Note: 3 The LTIP that would be included in the 2023 single total figure for remuneration is the 2021-2023 LTIP cycle, under which awards were granted in March 2021, with vesting based on performance over the performance period 2021 to 2023. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 223 Remuneration report (continued) Annual percentage change in remuneration of Directors and employees The table below shows the percentage change in the Executive Directors’ Fixed Pay, benefits and bonus each year between 2019 and 2023, compared with the percentage change in each of those components of pay for UK-based employees of Barclays Group and for employees of Barclays PLC, the Group’s parent company. For the Executive Directors, year-on-year percentage change figures are calculated using the single total figures for remuneration, annualised to a full-year equivalent where the individual served as an Executive Director for only part of the year. Fixed pay Benefits Annual bonus 2022/2023 1 C.S. Venkatakrishnan 2 Anna Cross Median UK employee 3 Median employee of Barclays PLC 1 C.S. Venkatakrishnan 2 Anna Cross 2021/2022 Tushar Morzaria Median UK employee 3 Median employee of Barclays PLC 1 C.S. Venkatakrishnan 2020/2021 Tushar Morzaria 4 Jes Staley Median UK employee 3 Median employee of Barclays PLC Tushar Morzaria 4 Jes Staley Median UK employee 3 Median employee of Barclays PLC 2019/2020 Notes: 3% 4% 9% 1% 2% n/a 2% 5% 10% n/a 2% 1% 5% 11% 0% 0% 7% 7% (38%) 17% 11% 10% 853% n/a 82% 10% 15% n/a (10%) (12%) 6% 0% 9% 10% 20% 26% (27%) (25%) (5%) (43%) (16%) n/a (20%) 3% (2%) n/a 152% n/a 42% 38% (49%) (49%) (16%) (16%) 1 C.S. Venkatakrishnan was appointed as Group Chief Executive with effect from 1 November 2021. His remuneration figures for 2021 are annualised to a full-year equivalent for the purpose of this comparison. The value of his benefits includes the cost to the Group of providing him with relocation support, including immigration assistance, home search support in London, and payments (which ended on 31 October 2023) for temporary accommodation in London. No percentage change figures can be calculated for 2020/21 as he did not receive any remuneration in respect of services provided as an Executive Director in 2020. 2 Anna Cross was appointed as Group Finance Director with effect from 23 April 2022. Her remuneration figures for 2022 are annualised to a full-year equivalent for the purpose of this comparison. No percentage change figures can be calculated for 2021/22 as she did not receive any remuneration in respect of services provided as an Executive Director in 2021. 3 The Barclays PLC comparison is included because this is a statutory requirement, though Barclays PLC employs only a very small number of Head Office employees (51 in 2023). 4 Jes Staley's bonus figures reflect the disclosed figures and have not been restated for the decision made by the Committee in 2023 that Jes Staley should be ineligible for 2021 bonus and should forfeit his unvested bonus awards, as outlined earlier in this Remuneration report. For C.S. Venkatakrishnan and Anna Cross, the 2022 to 2023 Fixed Pay changes reflect the 3.4% and 4.3% increases agreed respectively for each, effective 1 March 2023. The annual bonus outcome for C.S. Venkatakrishnan is down 27% and the outcome for Anna Cross is down 25% (on a full-time equivalent basis) – the 2023 annual bonus outcomes section of this Remuneration report provides more information. The reduction in the value of benefits for C.S. Venkatakrishnan in 2023 primarily reflects his temporary accommodation in London ending during the year and some relocation-related benefits costs in 2022 that were not repeated in 2023. For UK employees across the Group, the 9% increase in median fixed pay primarily reflects higher-than-normal salary increases in early 2023 as part of that year's UK pay deal. The 5% decrease in median bonus in respect of 2023 performance reflects the change in pay structure during 2023 to simplify pay for junior employees in Barclays UK and support functions in the UK. For some employees, a portion of previous bonus opportunity was transferred into fixed pay – leading to lower 2023 bonus outcomes for those employees. The 11% increase in benefits is largely due to increased life assurance and private medical insurance costs. Barclays PLC only employs a very small number of Head Office employees (51 in 2023), and there is frequent movement of employees between Barclays PLC and other entities within the Barclays Group. For comparison purposes the Barclays PLC figures are therefore based only on the 40 individuals who were employed by Barclays PLC in both years. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 224 Remuneration report (continued) The table below shows the percentage change in fee each year between 2019 and 2023 for the Chairman and the Non-Executive Directors serving on the Barclays PLC Board during 2023, including fees for Board Committee memberships and/or subsidiary board positions. The changes in fees shown relate to changes in responsibilities of the Non-Executive Directors. The Non-Executive Directors appointed to the Barclays PLC Board during 2023 are not shown, as they did not receive relevant fees prior to 2023 so no percentage change figures can be calculated. 2022/2023 fees1,2 2021/2022 fees1 2020/2021 fees1 2019/2020 fees1 Nigel Higgins Mike Ashley Robert Berry Tim Breedon 3 Mohamed A. El-Erian 4 Dawn Fitzpatrick 5 Mary Francis Crawford Gillies Brian Gilvary 6 Diane Schueneman 7 Julia Wilson Notes: 5% 1% 9% 1% 12% 11% 24% 5% 2% 12% 107% 0% (2%) n/a (19%) 3% 18% 5% (2%) 3% 4% 13% 0% 0% n/a 64% 11% 14% 8% 108% 95% (4%) n/a 0% 19% n/a 24% n/a 36% (3%) 4% n/a 3% n/a 1 In the year that a Non-Executive Director was appointed to or stepped down from the Barclays PLC Board, fees for that year are annualised to a full-year equivalent. Additional information has been provided in the notes that follow where 2022/2023 percentage changes in fees, which excludes benefits, were greater than 10%. 2 Fees for the Group Chairman and Non-Executive Director roles on the Board and Board Committees of Barclays PLC were increased by 5%, with effect from 1 January 2023. This excluded the Board Sustainability Committee, which was established on 23 March 2023. 3 Mohamed A. El-Erian joined the Board Nominations Committee with effect from 1 September 2022 and received pro-rata fees for that year. For 2023, the full-year fees were paid, therefore increasing the fees paid from 2022 to 2023. 4 Dawn Fitzpatrick joined the Board Sustainability Committee with effect from 23 March 2023 and received pro-rata fees for that year, therefore increasing the fees paid from 2022 to 2023. 5 Mary Francis was appointed the BBPLC Consumer Duty Champion with effect from 10 November 2022 and received pro-rata fees for that year. For 2023, full-year fees for that role were paid. She also joined the Board Sustainability Committee with effect from 23 March 2023 and received pro-rata fees for that year, therefore increasing the fees paid from 2022 to 2023. 6 The increase in fees paid from 2022 to 2023 for Diane Schueneman was primarily driven by an increase in fees for her role as Chair of Barclays Execution Services Limited and as a Non- Executive Director of Barclays US LLC. 7 Julia Wilson joined the Board Nominations Committee and Board Risk Committee with effect from 1 September 2022 and received pro-rata fees for that year. For 2023, the full-year fees for that role were paid. She also joined the Board Sustainability Committee with effect from 23 March 2023, the Barclays Bank PLC Board with effect from 1 April 2023, and the Board Remuneration Committee with effect from 1 July 2023. She was appointed Chair of the Board Audit Committee with effect from 1 April 2023 and Chair of the Barclays Capital Securities Limited Board with effect from 24 April 2023, and received pro-rata fees for that year – therefore increasing the fees paid from 2022 to 2023. Relative importance of spend on pay A year-on-year comparison of Group compensation costs and of distributions to shareholders is shown below. The distributions shown relate to dividends paid and share buyback programmes completed during the year. The distributions for 2023 do not include the dividends and share buyback programme announced on 20 February 2024. Group compensation costs Distributions to shareholders9 £m 2023 2022 £m 2023 2022 n Other compensation-related income statement charges n Income statement charge for performance costs 8 n Share buybacks n Dividends Notes: 8 Relates to costs arising from salaries and other elements of fixed pay, social security costs, post-retirement benefits and other compensation costs. 9 The chart shows dividends paid and share buyback programmes completed during the year. For example, for 2023, the figure represents the 2022 full-year dividend paid, the share buyback programme announced with the 2022 results, the 2023 half-year dividend, and the share buyback programme announced with the half-year results. The shareholder distributions announced on 20 February 2024 are not reflected in this chart. 8,7198,3496,9696,5131,7501,8362,4602,5281,2501,5001,2101,028Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 225 Remuneration report (continued) Chairman and Non-Executive Directors Remuneration for Non-Executive Directors reflects their responsibilities and time commitment, and the fees paid are comparable with those paid in Barclays' international peer group, with a particular focus on the UK banks. Fees shown reflect actual fees paid for periods of service on the Board, any Board Committees and, where applicable, subsidiary Boards and Board Committees. Non-Executive Directors are reimbursed expenses that are incurred for business reasons. Any tax that arises on these reimbursed expenses is paid by Barclays. Chairman and Non-Executive Directors: Single total figure for 2023 remuneration (audited) Chairman 1 Nigel Higgins Non-Executive Directors 2 Mike Ashley Robert Berry Tim Breedon Mohamed A. El-Erian Dawn Fitzpatrick 3 Mary Francis 4 Crawford Gillies Brian Gilvary 5 Sir John Kingman 6 Marc Moses Diane Schueneman Julia Wilson Notes: 2023 £000 840 85 273 396 173 221 210 214 246 334 178 433 279 Fees 2022 £000 800 260 213 392 155 200 173 490 241 — — 388 135 2023 £000 Benefits 2022 £000 8 — — — — — — — — — — — — 7 — — — — — — — — — — — — 2023 £000 848 85 273 396 173 221 210 214 246 334 178 433 279 Total 2022 £000 807 260 213 392 155 200 170 490 241 — — 388 135 1 Nigel Higgins does not receive a fee in respect of his role as Chairman of Barclays Bank PLC. 2 Mike Ashley stepped down from the Board with effect from 3 May 2023. 3 Mary Francis was appointed the BBPLC Consumer Duty Champion with effect from 10 November 2022 and received pro-rata fees for that year as a retrospective payment in 2023. The 2022 fees have been updated to reflect that payment, which is therefore not included in the 2023 fees. 4 Crawford Gillies stepped down from the Board with effect from 31 May 2023. 5 Sir John Kingman was appointed to the Board with effect from 1 June 2023. 6 Marc Moses was appointed to the Board with effect from 23 January 2023. Chairman and Non-Executive Directors: Statement of implementation of remuneration policy in 2024 The fees for the Chairman and Non-Executive Directors (including Board and Board Committee roles) were reviewed in early 2024 and increased by 2% with effect from 1 January 2024, as set out in the table below. 7 Chairman Board member Additional responsibilities Senior Independent Director Chair of Board Audit or Risk Committee Chair of the Board Remuneration Committee Membership of Board Audit, Remuneration or Risk Committee Membership of Board Nominations Committee 8 Membership of Board Sustainability Committee Notes: 1 January 2024 1 January 2023 £ £ 856,800 96,400 840,000 94,500 38,600 85,700 75,000 32,100 16,100 15,300 37,800 84,000 73,500 31,500 15,750 15,000 7 The Chairman does not receive any fees in addition to the Chairman fees shown above. 8 The Board Sustainability Committee was established on 23 March 2023 and the 2023 fees in respect of membership of this Committee commenced from that date. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 226 Remuneration report (continued) Directors’ shareholdings and share interests Interests in Barclays PLC shares (audited) The table below shows the number of shares owned beneficially by each person who served as a Director during 2023 (including any shares owned beneficially by their connected persons). For the Executive Directors, it shows the number of shares over which each holds awards that are subject to either deferral terms or to deferral terms plus performance measures, and the number of shares owned outright includes shares purchased by the Director as well as shares received in relation to remuneration. All Barclays employees, including the Executive Directors, are prohibited from investment activities that may create conflicts of interest, and in particular from using personal hedging strategies to undermine the risk alignment effects embedded in remuneration, or any other hedging in respect of Barclays securities. The numbers shown for shares that are subject to performance measures represent the maximum number of shares that may be released if those performance measures were to be satisfied in full. The total share interests at 16 February 2024 were the same as shown below for all Directors in service as at 31 December 2023. Interests in Barclays PLC shares as at 31 December (or date of retirement from the Board, if earlier) Executive Directors C.S. Venkatakrishnan Anna Cross Chairman Nigel Higgins Non-Executive Directors 1 Mike Ashley Robert Berry Tim Breedon Mohamed A. El-Erian Dawn Fitzpatrick Mary Francis 2 Crawford Gillies Brian Gilvary 3 Sir John Kingman 4 Marc Moses Diane Schueneman Julia Wilson Notes: Unvested deferred awards Subject to performance measures Not subject to performance measures Total Owned outright 2,943,614 878,859 5,972,199 1,750,247 3,326,049 12,241,862 1,139,575 3,768,681 1,852,564 388,187 15,138 217,374 153,289 957,323 81,889 226,332 257,482 1,798 5,454 126,557 31,628 — — — — — — — — — — — — — — 1,852,564 — — — — — — — — — — — — 388,187 15,138 217,374 153,289 957,323 81,889 226,332 257,482 1,798 5,454 126,557 31,628 1 Mike Ashley stepped down from the Board with effect from 3 May 2023 and as a result his shareholdings are shown as at that date. 2 Crawford Gillies stepped down from the Board with effect from 31 May 2023 and as a result his shareholdings are shown as at that date. 3 Sir John Kingman was appointed to the Board with effect from 1 June 2023. 4 Marc Moses was appointed to the Board with effect from 23 January 2023. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 227 Remuneration report (continued) Executive Directors’ shareholdings and share interests (audited) The charts below show the value of Barclays shares held as at 31 December 2023 by C.S. Venkatakrishnan and Anna Cross, in each case using the Q4 2023 average Barclays ordinary share price of £1.4374. For C.S. Venkatakrishnan, the shareholding requirement is 233% of year-end Fixed Pay and for Anna Cross it is 224% of year-end Fixed Pay. C.S. Venkatakrishnan and Anna Cross have five years from their respective dates of appointment as Executive Directors to meet this requirement. Barclays shares held beneficially by each Executive Director count towards the shareholding requirement, as well as unvested shares that are not subject to performance conditions (net of estimated tax and social security). Unvested shares that are still subject to performance conditions do not count towards the shareholding requirements, but contribute to aligning the Executive Directors' interests with those of shareholders through share price exposure – and are therefore shown below after deduction of estimated income tax and social security withholding. For the unvested shares subject to performance conditions, the proportion that is ultimately released may range from 0% to 100% depending on the achievement of the performance measures for each award, and on continued employment in accordance with the relevant plan rules and the Directors' Remuneration Policy. Executive Directors are issued a shareholding statement twice yearly, informing them of the shareholding requirement and the level of shareholding they are required to meet and maintain. After an Executive Director has stepped down, the shareholding requirement is monitored and maintained through self-certification, to the extent it is not met via shares held within the Group’s employee share plans and nominee accounts. C.S. Venkatakrishnan £000 Actual Requirement Anna Cross £000 Actual Requirement Based on 31 December 2023 Fixed Pay of £2,875k. Based on 31 December 2023 Fixed Pay of £1,800k. C.S. Venkatakrishnan has until 31 October 2026 to meet this shareholding requirement, five years from the date of his appointment as Group Chief Executive. Anna Cross has until 22 April 2027 to meet this shareholding requirement, five years from the date of her appointment as Group Finance Director. n Actual shareholdings (including estimated after-tax value of unvested shares n Unvested shares subject to performance conditions (which do not count not subject to performance conditions) towards the requirement) n Shareholding requirement Payments to former Directors (audited) Former Group Finance Director: Tushar Morzaria As disclosed in the 2022 Remuneration report, Tushar Morzaria was provided with UK and US tax compliance services during 2023 in respect of Barclays employment income. Former Group Chief Executive: Jes Staley As disclosed in the 2022 Remuneration report, Jes Staley was provided with UK and US tax compliance services during 2023 in respect of Barclays employment income. As he is receiving no further Barclays employment income, these services ended in 2023. Former Group Finance Director: Chris Lucas In 2023, Chris Lucas continued to be eligible to receive life assurance cover, private medical cover and payments under the Executive Income Protection Plan (EIPP). Full details of his eligibility under the EIPP were disclosed in the 2013 Remuneration report (page 115 of the 2013 Annual Report). He did not receive any other payment or benefit in 2023. 6,5214,1126,6992,1311,3334,032Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 228 Remuneration report (continued) Previous AGM voting outcomes The table below shows the shareholder voting result in respect of our 2022 Remuneration report and Directors’ Remuneration Policy (approved by shareholders at the AGM held on 3 May 2023). For (% of votes cast and total number) Against (% of votes cast and total number) Withheld (total number) Vote on the 2022 Remuneration report at the 2023 AGM 87.76 % 12.24 % Vote on the Directors’ Remuneration Policy at the 2023 AGM 8,531,247,575 1,189,880,467 19,393,115 96.69 % 9,402,353,401 3.31 % 322,148,965 16,010,604 Barclays Board Remuneration Committee Committee responsibilities The Board Remuneration Committee is responsible for overseeing Barclays’ remuneration. The role of the Committee, as set out in the Terms of Reference, is to: • Set the overarching principles and parameters of remuneration policy across the Group • Consider and approve the remuneration arrangements of (i) the Group Chair, (ii) the Executive Directors, (iii) members of the Barclays Group Executive Committee and any other senior executives specified by the Committee from time to time, and (iv) all other Group employees whose total annual compensation is equal to or exceeds an amount determined by the Committee from time to time • Exercise oversight of remuneration issues (including retirement benefits). + The Committee’s terms of reference are available at home.barclays/ who-we-are/our-governance/board-committees Advisers to the Committee The Committee appointed PricewaterhouseCoopers (PwC) as its independent adviser in October 2017. The Committee considered the advice provided by PwC to the Committee during the year and was satisfied that the advice is independent and objective. PwC is a signatory to the voluntary code of conduct in relation to executive remuneration consulting in the UK. PwC was paid £142,000 (excluding VAT) in fees for its advice to the Committee in 2023 relating to the remuneration of the Directors (either exclusively or along with other employees within the Committee’s Terms of Reference). In addition to advising the Committee, PwC provided unrelated consulting advice to the Group in respect of strategic advice on business, regulation, risk and controls, operational models and cost, taxation, technology, pensions, HR and sustainability issues. Throughout 2023, Willis Towers Watson (WTW) provided the Committee with market data on compensation, as context when considering incentive levels and remuneration packages. WTW was paid £78,500 (excluding VAT) in fees for these services. In addition to the services provided to the Committee, WTW also provides market data on compensation for other roles below Board level, pensions and benefits advice and brokerage services to the Barclays Group, and administration services to a number of the Group's pension funds. In the course of its deliberations, the Committee also considered the views of the Group Chairman, the Group Chief Executive, the Group Human Resources Director and the Group Reward and Performance Director. The Group Finance Director and the Group Chief Risk Officer provided regular updates on Group and business financial performance and risk profiles respectively. The Head of Corporate Communications attended when requested, to advise on reward communications and disclosures. The Group General, Counsel or other representatives from the Legal function, and the Company Secretary advised on legal and governance-related matters. No Barclays employee or Director participated in decisions of the Committee relating to his or her own remuneration. No other advisers provided services to the Committee in the year. Committee effectiveness in 2023 The results of the Committee effectiveness review for 2023 confirm the Committee is operating effectively. It is considered to be well constituted and chaired, providing an effective and appropriate level of constructive challenge and oversight of the areas within its remit, including in respect of areas of judgement and discretion. The review highlights that the Committee is considered to have the right level of skills and experience, and is of an appropriate size, having benefited from the addition of new members during the year. Feedback indicates that the Committee is considered to operate at the right level of debate, and confirms that the allocation of time between agenda items in Committee meetings is appropriate, with sufficient time for discussion and challenge. The Committee’s interaction with the Board, Board Committees and senior management is considered effective, noting the strong level of support provided to the Committee by senior management, and that sufficient time is allocated at Board meetings for the Chair to report to the Board on the work of the Committee. The Committee’s interaction with the BBPLC and BBUKPLC Board Remuneration Committees was also considered effective, and operates in line with regulatory requirements. + More information on the 2023 Committee effectiveness review process can be found in the Board Nominations Committee report page 164 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 229 Remuneration report (continued) Committee activity in 2023 and early 2024 The following table summarises the Committee’s activity during 2023, and at the January and February 2024 meetings at which remuneration decisions reported in this Remuneration report were finalised. The Committee is also provided with updates at each scheduled meeting on: the operation of the Committee’s Remuneration Control Framework on hiring, retention and termination; headcount and employee attrition; and extant LTIP performance. January 2023 February 2023 June 2023 October 2023 December 2023 January 2024 February 2024 Overall remuneration Finance and Risk updates Incentive funding proposals including risk and control adjustments Remuneration report 2022 Group budgets for fixed pay increases Wider workforce considerations Incentive funding approach Barclays’ Fair Pay Agenda and Report Directors' Remuneration Policy Remuneration report 2023 Executive Directors’ and senior executives’ bonus outcomes Annual bonus and LTIP performance measures and target calibration Regulatory and stakeholder matters Discussion with independent adviser Remuneration Review Panel update Review of Committee effectiveness Executive Directors’ and senior executives’ remuneration Governance ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ One ad-hoc Committee meeting was called during 2023. ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 230 Other Governance This section aims to provide an overview of certain governance matters of particular relevance to ESG ratings agencies and investors across a range of ESG matters. It covers topics such as our Code of Conduct, Whistleblowing, Tax, Financial crime, Health and Safety and how we manage our Data privacy and Security as well as Resilience. This section also includes our approach to managing social and environmental impacts as well as our Governance disclosures as part of the TCFD recommendations. This section does not discuss general corporate governance matters. Refer to the Board Governance report from page 144 in the Annual Report for information relating to the Board, ExCo and Board Committees, our Board governance framework and how we complied with the requirements of the 2018 UK Corporate Governance Code during 2023. Climate and sustainability governance Managing impacts in lending and financing Our supply chain Human rights / Modern slavery Supporting our customers The Barclays Way Whistleblowing Tax Financial crime Health and safety Managing data privacy, security and resilience 231 236 238 239 242 245 246 247 249 250 251 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 231 ESG Governance Climate and sustainability governance Oversight and management of climate-related issues are embedded within our governance structure. Barclays’ governance structure consists of the Barclays PLC Board (Board) and its Committees along with Executive and Management Committees which span across both business and legal entity lines. The Board sets the Group’s climate-related strategy and oversees its implementation by senior management. Governance structure Barclays PLC Board Board Sustainability Committee Board Risk Committee Board Audit Committee Board Remuneration Committee Group Executive Committee (Group ExCo) Group Reputation Risk Committee Group Risk Committee Group Sustainability Committee Disclosure Committee Climate Risk Committee Business / Legal Entity Functions / Committees & Forums Operational Sustainability Steering Committee BBplc Transaction Review Committee Principal Investments Equity Committee Financed Emissions Programme Group Chief Compliance Officer Group Sustainability Chief Information Officer Group Chief Operating Officer Group Chief Risk Officer Group Head of PPCR Group Head of Climate Risk Group Head of Sustainability Group Head of Sustainable Finance - Corporate & Investment Bank CEOs - Corporate & Investment Bank and Barclays UK Head of Social Purpose and sustainable Finance - Barclays UK Group Finance Director BX Risk and Finance Chief Operating Officer Group Head of Finance - Sustainability and ESG Note 1 The presentation of senior management is not directly aligned to the committees / forums upon which they reflect. Climate and Sustainability Governance changes during 2023 During 2023 a number of changes were made to the governance of Climate and Sustainability related matters. In particular the Board Sustainability Committee and the Group Sustainability Committee (GSC) were established to provide oversight of climate matters and the Group's sustainability agenda. The GSC has incorporated the work of the Climate and Sustainable Finance Council and oversees the activity of the Financed Emissions Programme, one of the three pillars of our Climate Strategy. Further details on these Committees can be found below. For transaction-related oversight and approval, the Transaction Review Committee has absorbed the responsibilities of the Climate Transaction Review Committee and reflects the business-as-usual approach to reviewing transactions. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 232 ESG Governance (continued) Roles and responsibilities of the Board and Board Committees with respect to climate-related matters Board / Board Committee Board Board Sustainability Committee Board Risk Committee Board Audit Committee Board Remuneration Committee Roles and responsibilities Responsible for the overall leadership of the Group (with direct oversight of matters relating to strategy, reputation and culture). The Board sets the Group’s strategy, including in respect of climate. Responsible for oversight of climate matters and the Group’s sustainability agenda, and supports the Board in considering the suitability of the Group’s climate and sustainability strategy, position statements, frameworks, ambitions, metrics, and targets and monitoring the implementation of the Group’s climate and sustainability strategy. Responsible for monitoring Principal Risks (including Climate risk), considering the Group’s risk appetite and tolerances, along with reviewing the Group’s risk profile and commissioning, receiving and considering reports on key risk issues. Responsible for overseeing the integrity of the Group's financial disclosures, the effectiveness of the internal control environment and consideration of non-financial reporting. This Committee oversees financial and narrative reporting which encompasses ESG and climate disclosures within the Annual Report. Responsible for setting the overarching principles and parameters of remuneration policy across the Group. This Committee has responsibility for aligning Executive Director remuneration with strategic priorities, including in relation to climate and sustainability matters. Board and Board Committee oversight of climate-related risks and opportunities Barclays PLC Board The Board and, as appropriate, its Committees are responsible for the oversight of climate and sustainability matters, including climate-related risks and opportunities. During 2023, the Board received six climate-related updates. These covered matters such as progress against our climate strategy, progress against targets and target setting, and stakeholder engagement. Outside of formal Board briefings, the Group Head of Public Policy and Corporate Responsibility also engaged with Board members on matters relating to the Group’s climate strategy. Please see the Key Board activities section on page 153 for further detail about what the Board considered in relation to climate and sustainability matters in 2023. The Board is supported in its work by its Committees, each of which has its own Committee terms of reference setting out its remit and decision-making powers. The Chairs of each of the Board Committees provide a report on the work of their Committee at every scheduled Board meeting. Board Sustainability Committee During 2023, the Board Sustainability Committee met four times. It reviewed significant climate and sustainability updates and proposals prior to Board consideration and received regular progress updates from management in relation to the Group’s climate and sustainability strategy, as well as internal and external briefings on climate and sustainability matters. Please refer to page 180 for further detail on the work of the Board Sustainability Committee. Board Risk Committee During 2023, the Board Risk Committee received quarterly reports from the businesses (including the Corporate and Investment Bank and Barclays UK) on their climate strategy and also received an update from the Head of Climate Risk. The Committee received a teach-in from the Risk function, providing an overview of how climate change was driving financial and operational risks, the materiality of their impact and how Barclays was managing them through the Climate Principal Risk Framework. The Committee also received three Climate risk dashboards during the year, updating the Committee with key Climate risk metrics. Please refer to page 174 for further detail on the work of the Board Risk Committee. Board Audit Committee The Board Audit Committee provides oversight of the climate and sustainability disclosures within the Group's narrative reporting, receiving input also from the Board Sustainability Committee on those disclosures. The Committee continues to monitor that the impact of climate change has been addressed in preparing the Group’s financial statements. Please refer to page 166 for further detail on the work of the Board Audit Committee. Board Remuneration Committee The Board Remuneration Committee is responsible for setting the overarching principles and parameters of remuneration policy across the Group. The Committee has responsibility for aligning Executive Director remuneration with strategic priorities, including in relation to climate and sustainability matters. The performance measures for the 2024 annual bonus and 2024-2026 Long Term Incentive Plan awards for the Executive Directors include a 'Climate and sustainability' category, focusing on climate-related measures reflecting our ambition to be a net zero bank by 2050, including our commitment to align our financing with the goals and timelines of the Paris Climate Agreement. The measures include progress towards our Sustainable and Transition Financing target, reducing financed emissions and operational emissions, and supporting our communities. Please refer to the Remuneration report from page 191 for further detail on the work of the Board Remuneration Committee. Nature-related governance The Board Sustainability Committee provides formal oversight of climate and sustainability matters, including nature and biodiversity. During 2023, the Board Sustainability Committee and Group Sustainability Committee, a sub-committee of the Group Executive Committee, each received a briefing on nature and biodiversity delivered by an external organisation. The sessions covered nature-related policy and regulatory developments, and work conducted by Barclays as part of the UNEP FI pilot to test the draft TNFD framework risk assessment process (LEAP FI) on our agriculture and food portfolio in the UK and Europe. + You can read more about our approach to nature and biodiversity on page 124. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 233 ESG Governance (continued) Management's role in assessing and managing climate-related risks and opportunities Oversight and management of Barclays' climate strategy is increasingly embedded in business-as-usual management structures, including a number of executive committees. These committees are mandated and form part of Barclays’ formal governance architecture. They are convened to oversee a specific attribute of the Barclays control framework. Each committee is itself governed by Terms of Reference that lay out the duties, decision-making authority and escalation route of any material issues. The executive management committees receive regular briefings on matters including climate change. Both risks and opportunities are considered by management. Climate-related risks are assessed and escalated as appropriate through the various risk forums. In 2023 the Group Sustainability Committee was established as a dedicated forum to identify and discuss climate-related matters across the Group with a specific mandate to review and propose amendments to the Group Climate strategy prior to consideration by Group ExCo. Group Executive Committee (Group ExCo) Throughout 2023 Group ExCo has been provided with regular updates on our climate strategy, including progress on our commitments, stakeholder engagement and expectations, and target-setting. The Group Head of PPCR is a member of Group ExCo and is accountable for ensuring the Group’s societal purpose is present in strategic decision-making at the highest levels in the organisation. The Group Head of PPCR, and their team, regularly updates Group ExCo on a range of Public Policy and Corporate Responsibility matters, covering key government and regulatory policy, regulator engagement and ESG matters, including climate. In particular, the Group Head of PPCR provided updates on the Climate strategy including proposed amendments to the oil and gas policy and the establishment of new targets for aviation, agriculture and commercial real estate. Updates were also provided on a range of other matters, such as greenwashing, deforestation and biodiversity. The Chief Risk Officer is a member of Group ExCo and is accountable for the approach to managing climate-related financial and operational risks to Barclays; this is implemented within the Group's Enterprise Risk Management Framework (ERMF). During 2023, Group ExCo established the Group Sustainability Committee to advise and provide recommendations on a broad range of sustainability issues as further described in the Climate and Sustainability Governance section of this report. Group ExCo was presented with updates on the proposed policy for upstream oil & gas financing. Capturing the opportunity as we transition towards a low-carbon economy was identified as a key strategic growth pillar for Barclays in 2022 and informed the setting of a $1trn Sustainable and Transition Financing target by the end of 2030. In 2023, a Group sustainable finance strategy was developed by the new CIB Global Head of Sustainable Finance and the BUK Head of Social Purpose & Sustainable Finance, setting out areas of strategic focus for the group in delivering the $1trn target. The strategy was presented to Group ExCo and Group Board. All submissions to the Barclays PLC Board on Climate Strategy and climate-related matters are reviewed either by Group ExCo or the relevant Group ExCo member in advance. Executive Remuneration Annual bonus outcomes and Long Term Incentive Plan (LTIP) award outcomes for the Executive Directors of Barclays PLC are assessed against a framework of measures set by the Remuneration Committee at the start of the performance period for each award. A proportion of both annual bonus and LTIP is driven by non- financial performance measures, including measures relating to climate and sustainability. The weighting of the Climate and sustainability category is 15% in the 2024-2026 LTIP and 5% in the 2024 annual bonus. The climate-related measures reflect our ambition to be a net zero bank by 2050, including our commitment to align our financing with the goals and timelines of the Paris Climate Agreement. The measures include progress towards our Sustainable and Transition Financing target, reducing financed emissions and operational emissions, and supporting our communities. Further details can be found in our + Remuneration report from page 191. Group Sustainability Committee (GSC) The Group Sustainability Committee (GSC), a sub-committee of Group ExCo, is chaired by the Group Head of PPCR with senior representation from the Group Head of Sustainability, Head of Sustainable Finance for CIB and Head of Social Purpose and Sustainable Finance for Barclays UK, as well as members representing key functions across the Group. The GSC is responsible for recommending the overall Group sustainability strategy for approval by Group ExCo, and ensuring alignment of business unit climate strategies to the overall strategy. The GSC is also responsible for determining, agreeing or recommending position statements, frameworks, targets, relevant disclosures and advocacy areas necessary to support strategy delivery and agreeing the strategic change priorities to support overall sustainability strategy. Group Risk Committee (GRC) The GRC is the designated forum to review and recommend, where necessary, submissions to the BRC. The GRC is the most senior risk executive body, and it monitors Principal Risks and key topics material to Barclays such as climate change. In 2023, in relation to climate, the GRC reviewed: • key regulatory, global policy and geopolitical themes and management action proposed and taken • physical and transition risk metrics, including portfolio alignment progress against net zero sector targets and mitigation plans • the Climate Risk Framework and Climate Risk Appetite constraints • scenario theme, severity and results of the climate stress test and internal stress test, including implications on stress loss limits In relation to Principal Risks, the GRC undertakes the following: • review and monitor the risk profile of material nature for each Principal Risk • approve for consideration by Barclays PLC Board and BBPLC Board Risk Committee the Risk Appetite Statement for each Principal Risk • annually review and approve the Principal Risk Framework for consideration by the Barclays PLC Board and BBPLC Board Risk Committee. The GRC receives escalations from the Climate Risk Committee, noting none were received in 2023 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 234 ESG Governance (continued) Climate Risk Committee (CRC) To support the oversight of Barclays' climate risk profile, the CRC was established in 2021 as a sub-committee of GRC. The authority of the CRC is delegated by the GRC, and the Group Head of Climate Risk is the Chair of CRC. The CRC has reviewed and approved a range of updates including the climate risk appetite and plans for embedding climate risk into business activities. Additionally, quantitative and qualitative metrics, emerging climate risk trends and progress against targets are presented and discussed at the CRC. Disclosure Committee (DisCom) DisCom, which is chaired by the Group Finance Director, has been set up as a sub- committee of the Group ExCo. DisCom is convened to review and monitor the integrity of the Group’s financial and narrative statements and other information provided to stakeholders, whether by means of announcement or otherwise. In addition to reporting to the Group ExCo, DisCom also reports to the BAC. DisCom is convened to undertake a number of specific duties, including: • financial reporting: to review and monitor the integrity of the Group’s financial statements, interim management statements, preliminary announcements (if prepared), and any other formal announcements relating to the Group’s financial performance. • narrative reporting: to review and monitor the integrity of the Group’s narrative statements, including but not limited to the Country Snapshot, ESG disclosures, the TCFD disclosures and the Modern Slavery Statement. Group Reputation Risk Committee (GRRC) The Group Reputation Risk Committee (GRRC) is a sub-committee of the Group ExCo which reviews and challenges, and directs as appropriate, the management and mitigation of Reputation Risk matters in the Barclays Group as they are brought to the attention of the Committee via relevant Reputation Risk assessment and escalation processes. This includes Reputation Risk associated with climate- related matters. The GRRC is chaired by the Group Chief Compliance Officer, as the Principal Risk owner for Reputation Risk in the Bank, and members include the Group CRO and Group Head of PPCR. In 2023 the GRRC considered certain transactions in scope of the bank's Sustainability Standards to evaluate their alignment with the bank's climate change and sustainability strategy. Group Chief Executive Officer (Group CEO) The Group CEO is responsible for driving Barclays’ focus on external societal and environmental stewardship, and overseeing progress towards Barclays’ ambition to be a net zero bank by 2050. The Group CEO is Chair of Group ExCo. The Group CEO is closely involved in identifying, accelerating and promoting the development of Barclays’ climate and sustainable finance growth opportunities as we transition towards a low-carbon economy. The Group CEO has been an active member of the Sustainable Markets Initiative's Financial Services Taskforce and both attended and spoke at the Autumn CEO Summit during New York Climate Week in September 2023. In 2023, the Group CEO co-led the Nature-based Solutions (NbS) workstream which published the Coastal NbS Practitioners Guide in November 2023. The Group CEO has also been a Leadership Council member of the United Nations Environment Programme Finance Initiative (UNEP FI) since 2022 and attended the annual council meeting in December 2023. The Group CEO also participated in London Climate Action week, hosting a roundtable discussion with company CEOs from Barclays' Sustainable Impact Capital Portfolio. Chief Risk Officer (CRO) The Group CRO is accountable for the approach to managing climate-related financial and operational risks to Barclays. This encompasses the measurement, monitoring and limit setting for Climate risk and the supporting governance. Group Head of PPCR The Group Head of PPCR leads the Group’s overall sustainability and citizenship agendas. Specifically, the role is responsible for leading Barclays’ efforts in tackling climate change, and for integrating our ambition to help embed the transition towards a low-carbon economy into the business. Group Head of Sustainability The Group Head of Sustainability leads the Sustainability and ESG team, and the strategic direction and execution of Barclays’ policies and practices across a broad range of sustainability and ESG matters, including climate change. The role also oversees the development of standards and metrics to advance green and sustainable finance and support innovation in sustainable product development. This role is responsible for Reputation risk issues arising from climate change, although the Board has overall responsibility for reputation matters generally. The Group Head of Sustainability reports directly to the Group Head of PPCR. Group Head of Climate Risk The Group Head of Climate Risk is the Climate Principal Risk owner accountable for the management and oversight of the climate risk profile. The Group Head of Climate Risk reports directly to the Group CRO and is the Chair of CRC. The Group Head of Climate Risk is responsible for the development and implementation of climate risk governance, including ownership of Barclays’ Climate Risk Framework and Policy. The Group Head of Climate Risk is also responsible for integrating climate risk considerations into existing risk management processes and overseeing climate risk management activities, including identifying, assessing, and monitoring climate risk drivers and proposing climate risk appetite, limits and controls. The Group Head of Climate Risk also leads the development of climate risk methodologies and Barclays’ approach to carbon modelling, including the BlueTrack™ methodology. Group Sustainability Chief Information Officer Created in 2023, the Group Sustainability Chief Information Officer (CIO) brings together technology, data and change execution expertise. The Group Sustainability CIO works in partnership with the business and functions to deliver new capabilities that enable and accelerate delivery against the Group's sustainability strategy. Group Head of Finance - Sustainability and ESG The Group Head of Finance - Sustainability and ESG was appointed in January 2022. The role encompasses leading Barclays' global external, internal and regulatory reporting capabilities relating to sustainability and ESG, and tracking progress made across our businesses to meet our climate targets, which is fundamental to support our ambition to be a net zero bank by 2050. This includes embedding climate-related disclosures such as the TCFD into our framework of disclosure procedures, governance and Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 235 ESG Governance (continued) controls supporting the creation, review and approval of the Group’s financial statements. Further responsibilities include embedding climate-related risks and opportunities into financial planning. Global Head of Sustainable Finance - Corporate & Investment Bank The Global Head of Sustainable Finance for the Corporate and Investment Bank (CIB) is a member of the CIB Management Team, reporting to the Global Head of the CIB and the Group Head of PPCR. The role was created in 2022 to develop a centre of excellence for sustainable finance to support Barclays’ clients navigate the opportunities and challenges of transitioning towards a low-carbon economy. The Group Head of Sustainable Finance for CIB is also a member of the Barclays Sustainable Impact Capital portfolio Investment Committee, which has a mandate to invest up to £500m in global climate technology companies by the end of 2027. The role partners closely with Barclays’ Sustainability & ESG team on our net zero ambition and environmental and social risk management and with the Head of Social Purpose and Sustainable Finance for Barclays UK to deliver change across the Group. Head of Social Purpose and Sustainable Finance - Barclays UK The role of Head of Social Purpose and Sustainable Finance for Barclays UK was created in 2022 with responsibility for the strategic direction and execution of the Barclays UK sustainability strategy. The role oversees the development and delivery of Barclays UK products and propositions to enable our retail and small business customers to adopt more sustainable practices – covering finance, tools, education and partnerships. The role also partners closely with the Barclays UK Government Relations team to develop advocacy positions, as well as Legal, Risk and Compliance functions to embed sustainability into processes and frameworks. Implementation - business working level committees, forums and reports Business / Legal Entity committees / forums Oversight and management of climate- related risks and opportunities occur at a number of levels in the organisation and across business lines and legal entities. Barclays operates through a combination of formal mandated committees and governance bodies/forums. The mandated committee structure operates on a legal entity basis and will oversee climate-related issues relevant to that entity. These are supported by Subcommittees/ other governance bodies/forums which can operate on a legal entity basis or across the Group and oversee climate- related issues, risks and opportunities within their remit and escalate material issues as appropriate. These committees and forums follow the established escalation process for climate-related items, bringing updates first to the relevant Group ExCo member, then the Group ExCo, and ultimately to the Board. Operational Sustainability Steering Committee (OSSCo) Barclays’ Operational Sustainability Steering Committee (OSSCo) is responsible for the development and implementation of the Group’s net zero operations strategy. OSSCo is chaired by the Barclays Execution Services (BX) Chief Operating Officer and comprises leadership from Corporate Real Estate Solutions (CRES) & Location Strategy, Barclays UK, Procurement and Sourcing, Group Technology Infrastructure Services (GTIS), Corporate Communications, Group Sustainability & ESG, and Legal. OSSCo reviews and approves environmental operational targets, reviews operational sustainability programmes and mitigates risks to the delivery of the net zero operations strategy. OSSCo also facilitates coordination and alignment across the functions responsible for implementing the net zero operations strategy. OSSCo provides updates to the GSC every quarter, which then reports to the Barclays PLC Board twice a year. BBplc Transaction Review Committee The BBplc Transaction Review Committee (TRC) is convened for senior management to review all BBplc Transactions that contain material Reputation Risk and escalates directly to the Group Reputation Risk Committee. The TRC has responsibility to ensure alignment with local entity and regulatory expectations and requirements when making decisions that impact the various subsidiaries of BBplc, including Barclays Bank Ireland PLC ('Barclays Europe') and the US Intermediate Holding Company. Transactions reviewed include transactions, relationships, agreements, strategies and other business activities. Principal Investments Equity Committee The Principal Investments Equity Committee (the “Committee”) undertakes the senior approval responsibilities relating to the execution and management of all principal strategic equity and workout equity transactions managed on behalf of Barclays PLC and all other Barclays Group entities. The formation and authority of this Committee comes from the Group CEO, acting through the Group ExCo. The Committee consists of senior stakeholders who meet on a regular basis which, when considering the ‘Sustainable Impact Capital’ portfolio, includes the Global Head of Sustainable Finance and Group Head of Sustainability for CIB. Financed Emissions Programme The Group change programme on climate ('the programme') is focused on driving the execution of one of the three pillars of our Climate Strategy, ‘Reducing our Financed Emissions’, within which Barclays is committed to aligning its financing with the goals and timelines of the Paris Agreement, consistent with scenarios limiting the increase in global temperatures to 1.5°C. The programme is set up in line with the Barclays Change Delivery Management standard, with established governance and regular reporting at the GSC. The overall Accountable Executive of the programme is the Group Head of Sustainability, also the chair of its governance body represented by key businesses and functions across the Group, such as Sustainability & ESG, Risk, Business (Corporate and Investment Bank and Barclays UK), Finance and Technology. Key focus areas of the programme since its inception include setting targets for some of our highest emitting sectors, establishing Climate risk as a new Principal Risk (as part of the Enterprise Risk Management Framework), embedding required processes and frameworks within the business to implement and manage sector targets, evaluating absolute emissions across the in-scope balance sheet, and delivering to a technology roadmap to meet climate data requirements. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 236 ESG Governance (continued) Managing impacts in lending and financing Appropriate management of environmental and social impacts helps to ensure the longevity of our business and our ability to serve our clients. Enhanced Due Diligence Monitoring At Barclays, we recognise the importance of risk identification and management in the provision of financial services to our customers and clients. Our assessment of environmental and social risks informs our wholesale credit risk management and helps safeguard our reputation. This supports the longevity of our business and also enhances our ability to serve our clients and support them in improving their own sustainability practices and disclosures. Managing environmental and social risks Environmental and social risks are governed and managed through our Enterprise Risk Management Framework (ERMF), setting our strategic approach for risk management by defining standards, objectives and responsibilities for all areas of Barclays. The ERMF is complemented by a number of other frameworks, policies and standards, all of which are aligned to individual Principal Risks. Our Climate Change Statement sets out our current restrictions on business appetite and includes restrictions in respect of certain sensitive energy subsectors (thermal coal mining, coal-fired power generation, mountain-top coal removal, upstream oil & gas and unconventional oil & gas including oil sands, Arctic oil & gas, hydraulic fracturing ('fracking'), Amazon oil & gas, ultra-deep water and extra heavy oil), as well as referencing new enhanced due diligence requirements for biomass which will be introduced during 2024.   We have also established positions on Forestry and Agricultural Commodities, World Heritage and Ramsar Wetlands and on the Defence and Security sector. In addition, we have developed internal standards for each of these which reflect these positions in more detail. These standards, which sit under the management of Reputation risk in the ERMF, determine our approach to climate change and relevant sensitive sectors and are considered as part of our existing transaction origination, review and approval process. Our standards currently include an enhanced due diligence approach for certain clients operating in the following energy sub-sectors covered by our Climate Change Statement: thermal coal mining, coal-fired power generation, mountain-top coal removal, oil sands, Arctic oil & gas and hydraulic fracturing ('fracking') and clients in-scope of our Forestry and Agricultural Commodities, World Heritage Sites and Ramsar Wetlands and Defence and Security standards where a similar approach is taken. This approach will be extended to cover the additional sectors brought into scope of the updated Climate Change Statement. All clients in-scope of the above mentioned standards must be assessed annually via a detailed Sustainability enhanced due diligence questionnaire, which is used to evaluate their performance on a range of environmental and social issues and may be supplemented by a review of client policies / procedures, further client engagement and adverse media checks as appropriate. This annual review either generates an Environmental and Social Impact (ESI) risk rating (low, medium, high), or in the case of Defence and Security an assessment against risk appetite, which in turn determines whether further review and client engagement may be required throughout the year. High and certain medium ESI rated clients would require further risk assessment prior to execution of transactions with those clients. We undertook 593 (2022:597) reviews in 2023, being a combination of Sustainability annual due diligence reviews and individual transaction reviews. Environmental risk reviews are captured within the business- as-usual credit process and are therefore no longer included within this number. As part of our management of environmental and social risks, we may require further client engagement in relation to the specific environmental and social risks that we have identified as part of our enhanced due diligence process. We have used this engagement as an opportunity to gain a more detailed understanding of the risks and challenges that the client is facing and to better understand any climate transition plan that they may have. Escalation and decision-making Where client relationships or transactions are assessed as higher-risk (high or medium ESI rating) or outside appetite (in the case of Defence and Security) following a Sustainability enhanced due diligence review, they are then considered for escalation to the appropriate business unit review committee (e.g. BBplc Transaction Review Committee) for consideration and a decision on whether to proceed if transaction related. Business unit review committees comprise of Business management and representatives from the control functions, including Reputation risk. Should the front office business team or the Sustainability and ESG team believe the issues are sufficiently material, these clients/relationships would be escalated to the Group Reputation Risk Committee (GRRC) for more senior consideration and decision. GRRC includes representation from the Group Executive Committee. These Committees may make the following determinations: • approve the transaction or relationship • reject the transaction or relationship • approve the transaction or relationship, subject to prescribed modifications • escalate the review of the transaction or relationship to the Barclays Group CEO. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 237 ESG Governance (continued) Training Barclays continues to expand the range and coverage of training to educate colleagues on ESG and climate change risk, its impact on society and Barclays' strategy and response. + Further details on Barclays skills, culture & training can be found on page 122. Transactions and client relationships reviewed by Group Sustainability n Agriculture n Chemicals n Commodity Traders n Defence, Aerospace & Security n Infrastructure & Transportation n Manufacturing n Metals & Mining n Oil & Gas n Paper & Forestry n Power & Utilities n Waste n Other 9 2 1 5 1 3 1 8 1 9 12 2023 Total 593 2022 Total 597 Equator Principles For project-related finance, we conduct assessments for environmental and social risks in line with the Equator Principles and relevant International Finance Corporation (IFC) Performance Standards. Barclays was one of the four banks that contributed to developing the Principles ahead of their launch in 2003. During 2023, 4 transactions (2022: 1 transaction) were reviewed for social and environmental risks under the scope of the Equator Principles. + Further details can be found at: equator-principles.com/ Equator Principles Transactions in 2023 Sector Mining Infrastructure Oil & Gas Power Others Region Americas EMEA APAC Country designation Designated Non-designated Independent review Yes No Finance type Project finance Category A B C 3 B 3 B 3 B 3 B 3 1 A 1 A 1 A 1 A 1 C C C C Category A: Projects with potentially significant adverse social or environmental impacts that are diverse, irreversible or unprecedented. Category B: Projects with potentially limited adverse social and environmental impacts that are few in number, generally site-specific, largely reversible and readily addressed through mitigation measures. Category C: Projects with minimal or no social or environmental impacts. Country Designation is based on the World Bank's income criteria. Projects in designated countries (High Income OECD members) are assessed only according to local laws. Projects in 'non-designated' countries are assessed according to local laws and the IFC's standards. 1632327721092528740792111920 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 238 ESG Governance (continued) Supporting our supply chain With nearly 9,0001 companies coming from 29 countries supplying us, our supply chain helps our businesses deliver for our customers, clients and colleagues. Though our businesses are geographically 2 diverse, more than 92% of our third-party spending is concentrated in the UK and the US with many of them having their own extensive supply chains. Our supply base is diverse across scale, ownership type and structure from privately-held start-ups to publicly-listed multinational corporations. Over the past several years, Barclays has sought to reduce the size of its supply chain while at the same time creating opportunities for 3 which encompass micro, diverse suppliers small or medium-sized enterprises and 4 diverse-owned businesses. + Please see further details on our requirements of external suppliers at: home.barclays/who-we-are/ our-suppliers/our-requirements-of-external- suppliers/ Highlights 8.5% Global spend with micro, small and medium-sized enterprises and diverse-owned suppliers (2022: 8.5%) 93%Prompt payment rate (2022: 93%) Third party operational and reputational risk management Barclays Directors, via management, must effectively manage, monitor and mitigate risks in our supply chain. We expect our Third Party Service Providers (TPSP) to make responsible decisions that, where relevant, take our stakeholders` needs into account in both the short and long term. Barclays expects the TPSPs to comply with applicable laws, regulations and standards within the geographies in which they 5 to operate. Barclays` standard approach new TPSP on-boarding and renewal begins by assessing the services that are being provided and ascertaining the level of risk. TPSPs that are assessed as being above a low risk of exposure from a business risk perspective (at the point of onboarding and on an ongoing basis) are subject to Barclays` Supplier Control obligations (SCOs). TPSPs to whom the SCOs apply become managed TPSPs and are subject to ongoing management and controls assurance during the term of service. Prior to contractual agreement and service go live, these TPSPs are required to complete a pre-contractual questionnaire which captures their adherence to the SCOs and Barclays` TPSP Code of Conduct (TPSP CoC). The TPSP CoC encourages our TPSPs to adopt our approach to doing business and details our expectations for matters including environmental management, human rights, diversity and inclusion and also for living the Barclays Values. Managed TPSPs are subject to controls assurance on an annual basis to assess whether the controls required of them under the SCOs are maintained and operating effectively. They are also asked to complete an annual self-certification against the individual topics contained within the TPSP CoC. Where TPSPs are unable to meet our expectations under the TPSP CoC and SCOs, the issue will be escalated and we will look for options to manage the risk, which may include additional oversight, heightened Barclays controls or electing not to do business with the TPSP. The TPSP CoC and SCOs are published on the Barclays public website for all new and existing suppliers to view and are refreshed periodically. Notes 1 Includes non-addressable spend and One Time Vendors (OTV). 2 92% by invoice value 3 Spending between Barclays and diverse suppliers is considered first-tier spending. Spending between Barclays’ first-tier suppliers that can trace subcontracted spend with diverse suppliers on Barclays-specific work is considered second-tier direct spending. 4 For Barclays, diverse suppliers are defined as either size diverse (small and medium sized enterprises) or ownership diverse (majority owned, controlled and operated by protected class groups, such as women, ethnic minorities, LGBT+, persons with disabilities, military veterans and for-profit social enterprises) 5 We do have relationships with financial institutions and market counterparties which, because of the nature of the services being provided (such as international account holding services), are not subject to our usual TPSP on-boarding procedures and which are therefore not subject to the TPSP CoC. + Please see further details on our climate change initiatives in our supply chain within our Achieving net zero operations section from page 73 within the Climate and Sustainability report. Payment on time Prompt payment is critical to the cash flow of every business, and especially to smaller businesses within the supply chain as cash flow issues are a major contributor to business failure. We aim to pay our TPSPs within clearly defined terms, and to help ensure there is a proper process for dealing with any issues that may arise. We measure prompt payment globally by calculating the percentage of TPSP spend paid within 45 days following invoice date. The measurement applies against all invoices by value over a three-month rolling average period for all entities where invoices are managed centrally. At the end of 2023, we achieved 93% on-time payment to our TPSPs compared to 93% at the end of 2022, exceeding our public commitment to pay 85% of TPSPs on time (by invoice value). The need to promptly pay our diverse TPSPs became even more important during the COVID-19 pandemic. Barclays established a process to expedite the payments for diverse TPSPs at this critical time. This process remained in place during 2023. Barclays is proud to be a signatory of the Prompt Payment Code in the UK and we also work closely with the Small Business Commissioner and other organisations, including Good Business Pays, to educate the public on late payments and the impact they can have on businesses and business owners, and to raise the social conscience of larger businesses who do not pay on time. Diversity, Equity and Inclusion in our supply chain Barclays believes that diversity across our supply chain expands our ability to attract and harness innovative solutions in the market that complement our own capabilities, while simultaneously creating value for customers and clients, and economic opportunities for wider, under- represented segments of society. This is why we launched our first Global Supplier Diversity (GSD) initiative, now celebrating 10 years of impact since 2013. The GSD initiative aims to position Barclays as a leader in providing inclusive procurement opportunities and driving economic impact to diverse businesses – diverse in size, ownership make-up or mission. As part of our GSD initiative in 2023, 8.5% 1 of our global addressable spend was placed with small and medium-sized enterprises and diverse-owned businesses as measured by first- and second-tier direct spending. First-tier suppliers are contracted directly by Barclays and second-tier direct suppliers are subcontractors to first-tier suppliers on Barclays-specific work. Ownership- diverse businesses are majority owned, controlled and operated by protected class groups, such as women, ethnic minorities, LGBT+, persons with disabilities, military veterans and for-profit social enterprises. In 2023, we added a new Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 239 ESG Governance (continued) diverse supplier category of mission- diverse, also known as social enterprises. Though a small segment of our diverse supplier spend, we will recognise and account for spend with businesses that are driven primarily by a social mission where they do not already qualify as small or ownership-diverse. In support of the GSD initiative, Barclays is a corporate member of, and plays an important role with, several of the most prominent domestic and international diverse supplier certification organisations including National Minority Supplier Development Council (nmsdc.org), Minority Supplier Development UK (msduk.org.uk), Women’s Business Enterprise National Council (wbenc.org), WeConnect International (weconnectinternational.org), National LGBTQ Chamber of Commerce (nglcc.org), OutBritain (outbritain.co.uk), National Veteran Owned Businesses Association (NaVoba.org) and Disability:IN (disabilityIn.org). In 2021, we pledged to double our spend with Black and women-owned businesses by 2025, with 2020 as the baseline year, and to grow overall spend with SMEs and diverse-owned businesses to 10% of Barclays annual global addressable spend. As of 2023, we are tracking to plan to double spend with Black and women- owned businesses by 2025 and to meet the overall 10% diverse supplier spend goal. As we institutionalise DEI across our supply chain, the aim is for service providers, which make up 70% of our addressable spend to have a diversity and inclusion policy or standard in place by 2025. We are continuing to engage and assess our suppliers and will report against our progress in the future. Note 1 Addressable spend is defined as external costs incurred by Barclays in the normal course of business where Procurement has influence over where the spend is placed. It excludes costs such as regulatory fines or charges, exchange fees, taxation, employee expenses or litigation costs, property rent. Modern slavery in our supply chain Barclays is committed to trying to identify and seeking to address modern slavery risks in our supply chain. Regardless of the industry or geography in which our Third Party Service Providers (TPSP) operate, we require them to comply with applicable laws and regulations. We describe our standard process of TPSP onboarding and renewal in the "Third Party operational and reputational risk management" section above. TPSPs that are assessed as being above a low risk of exposure from a business risk perspective become managed TPSPs and are requested to complete an annual self- attestation against topics contained within our TPSP Code of Conduct (TPSP CoC). The TPSP CoC identifies our expectations with regards to respecting human rights through areas such as occupational health and safety, freely chosen employment, avoidance of child labour and practices which could lead to exploitation of workers, freedom of religion and belief in the workplace, freedom of association and collective bargaining, zero tolerance for discrimination, harassment and abuse, accessible grievance and whistleblowing mechanisms. These expectations (which relate to human rights topics) are an important part of our efforts to meet our responsibility to respect human rights. We continue to strengthen the way we identify and assess modern slavery and we describe the ways we aim to do this in our Modern Slavery Statement. We are continuing to work with our TPSPs to support our ambition that those making 1 will have up 70% of our addressable spend a modern slavery policy or standard in place by 2025. Note 1 Addressable spend is defined as external costs incurred by Barclays in the normal course of business where Procurement has influence over where the spend is placed. It excludes costs such as regulatory fines or charges, exchange fees, taxation, employee expenses or litigation costs, property rent. Human rights Barclays continues to take action to enhance and further embed our approach to respecting human rights. During 2023 we worked towards two important milestones for our human rights work. We completed a saliency assessment of human rights risks in our Corporate and Investment Bank (CIB) financing portfolio to guide our next steps in enhancing the CIB approach to managing human rights risks. Insights from the saliency assessment informed updates to Barclays' Statement on Human Rights, which we published alongside this Annual Report. The Statement seeks to reflect our evolving approach to human rights and align with the relevant normative frameworks, in particular the UN Guiding Principles on Business and Human Rights (UNGPs). The Statement reiterates our commitment to respecting human rights as defined in the International Bill of Human Rights and the International Labour Organization’s (ILO) Declaration on Fundamental Principles and Rights at Work (ILO Declaration). Our approach is guided by the UNGPs and the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct. It also incorporates our Focus Areas for Progress, which set out our plans to enhance our approach to respecting human rights. In addition, during 2023 we continued our efforts to monitor issues and developments globally that may present new or elevated human rights risks and worked to evaluate our potential involvement and consider our responsibilities to seek to address, these risks. We also continued to embed human rights considerations into our position statements and related enhanced due diligence approach. For example, in our Forestry and Agricultural Commodities Statement we have introduced a requirement for in-scope clients to have a policy commitment to respect human rights across their operations and supply chain and the expectation that they undertake human rights due diligence across their operations and supply chain. + For further information of our management of environmental and social impacts in our lending please see page 236. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 240 ESG Governance (continued) Saliency Assessment for CIB Salient Issue What is the issue? Human impacts of climate change and the energy transition Indigenous Peoples Land Rights Modern Slavery Weapons and dual-use technology exports Notes: Climate change presents a number of physical risks and its impacts are varied and multifaceted. For example, sea level rise and extreme weather can threaten the rights to housing, to adequate standard of living, to food and water; and predicted increases in disease impact right to health. The transition from fossil fuels to low carbon energy is not without its own risks and challenges, climate change mitigation activities can contribute to impacts such as job losses and energy scarcity for communities who depend on fossil fuels. The development of clean energy sources can also have human rights impacts including exploitative land and labour practices as well as impact vulnerable communities like Indigenous Peoples. International law guarantees the rights of Indigenous Peoples, including traditional lands, cultural preservation, livelihoods, knowledge, security and their right to give or withhold their consent for any action that would affect their lands, territories or rights (Free Prior and Informed Consent (FPIC)).Indigenous Peoples' rights are increasingly being threatened, particularly in relation to the activities of certain sectors such as extractive, energy, and agriculture. The transition to renewable energy could exacerbate these impacts; recent research suggests that over half of energy transition metals and minerals projects are located on or near 1 . Indigenous Peoples' lands Business practices such as community relocation and resettlements are not uncommon in certain sectors, such as mining and agriculture, and can impact a range of human rights, including the right to adequate housing, food, water, health, education, and decent work. Resistance and protest against resettlement or other potential infringements of land-related rights by human rights defenders and local communities could also expose people to risk of additional adverse impacts such as suppression of freedom of association, detention or even physical harm. An estimated 50 million people were living in situations of modern slavery on any 2 given day in 2021, according to the latest Global Estimates of Modern Slavery . Modern slavery violates all human rights relating to decent work. However, modern slavery can also impact a multitude of other rights, for example to health, family life, freedom of movement, and even freedom from torture, cruel, inhuman or degrading treatment. The impacts of modern slavery can be severe and lasting, and this issue is prevalent in all geographies and most sectors. Technologies associated with the Defence and Security sector are continuously developing. This includes advancements such as autonomous weapons and dual- use technology which could be used in a multitude of applications including in weapons and surveillance technology. Weapons and dual use technologies, if misused, have the potential to cause some of the most severe human rights violations, in particular, in the context of repressive state action or conflict. 1 nature.com/articles/s41893-022-00994-6 2 cdn.walkfree.org/content/uploads/2022/09/12142341/GEMS-2022_Report_EN_V8.pdf Barclays worked with Shift, a non-profit and leading centre of expertise on business and human rights, and gathered a range of perspectives through engagement with both internal and external stakeholders, to seek to understand the most salient human rights risks to people connected to the CIB financing portfolio. We recognise that engagement, including with credible proxies for affected stakeholders, is essential to developing our understanding of the actual and potential human rights risks and enhancing the robustness and legitimacy of the process. In our external engagement, we engaged with ten civil society organisations (CSOs), selected by reference to their previous contact with Barclays in relation to human rights issues, and/or their recognised expertise, in particular, on the intersection between financial institutions and human rights. Engagement took place through a series of focused discussions, mostly facilitated by Shift. Our internal engagement included a series of workshops with colleagues from a range of functions including Sustainability, Risk, Compliance, Legal and the business and across the US, UK and APAC, followed by deep dive interviews with some of these colleagues. The insights gathered during this proactive engagement, complemented by insights from previous relevant engagement with CSOs, as well as desk-based research by the Barclays Social Policy team and Shift, informed the identification of a long list of human rights impacts. These impacts were then prioritised, through consideration of the relative severity of the impacts on people and their likelihood of occurrence, to produce a shortlist. This list and related analysis were presented to core stakeholders to review and test the application of the severity and likelihood criteria to finalise our five salient human rights issues, as set out in the table at right. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 241 ESG Governance (continued) We have subsequently identified our Focus Areas for Progress, setting out the actions we intend to undertake over time to enhance our approach to the management of our salient issues across the Barclays Group. We will report our progress in these Focus Areas in future Annual Reports. Corporate Culture   Strengthen a culture of respect for human rights  • Build capacity to support colleagues’ understanding of human rights risks and responsibilities Saliency Assessments Identify salient issues beyond CIB • Extend saliency assessment to other areas of the bank, looking to engage with internal and external stakeholders Focus Areas for Progress Policies and EDD Just Transition Remedy Develop our approach to remedy • Explore approach to remedy in engagement with clients Enhance sustainability policies and EDD to reflect salient issues for CIB • Review existing sustainability policies and EDDs and work to integrate salient issues • Evolve our approach to engaging with clients when responding to salient issues Support a transition to a low-carbon economy which accounts for the social risks as well as the opportunities • Work to consider just transition in our Transition Plan and Client Transition Framework • Continue engagement to help shape the way just transition is defined and implemented in practice Corporate culture We aim to take steps to build capacity to support colleagues' understanding of human rights risks and responsibilities by providing tailored training and guidance. Saliency assessments Taking an approach based on a risk-to- people lens, we prioritised CIB as an area for review. Our aim is to continue to identify the salient human rights impacts we may be connected to through our operations and value chain. We aim to initiate further saliency assessments, incorporating engagement with appropriate stakeholders. Policies and enhanced due diligence Our aim is to enhance our existing position statements and associated enhanced due diligence processes to better reflect the salient human rights issues identified through our assessment of CIB. Additionally, in response to analysis of our exposure to salient issues through our CIB financing portfolio, we may consider the development of additional position statements. To build on our risk identification and assessment, we aim to develop a pilot for engaging with clients in response to the salient risks identified. Just transition Barclays seeks to support a just transition which accounts for the potential social risks as well as opportunities of the energy transition and seeks effective dialogue with relevant stakeholders. We have taken steps to pilot the approach to just transition in our Client Transition Framework, and will consider the findings of the pilot in our engagement with clients. We also intend to include social considerations as we develop our transition plan. We believe that industry engagement is essential to advance our collective understanding and strategy to ensure a just transition. As such we intend to continue to work with peers and industry groups, and we have become founding members of the LSE Just Transition Finance Lab to help shape the way just transition is defined and implemented in the financial sector. + For more information on our approach to just transition, please see page 124. Remedy We recognise the importance of remedy in the context of human rights and aim to develop our understanding of good practice in this area. We will look to explore approaches to remedy through our engagement with our clients. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 242 ESG Governance (continued) Supporting customers through Barclays UK Barclays has a large retail presence in the UK, offering a wide range of products and services to c.20 million customers through Barclays UK. We recognise that there is a heightened need to help customers who may be experiencing financial vulnerability due to the inflationary pressures on household budgets and increased interest rates. We are endeavouring to support customers during these challenging times, and during 2023 have continued to focus on four key areas: 1.using data analytics to determine which customers are in need of support and the appropriate type of support; 2.engaging those customers impacted to increase awareness of products, tools and support available; 3.understanding customers’ needs and developing solutions to provide greater support; and 4.ensuring colleagues have, and are aware of, the financial health tools to enable them to support customers. To better support financially vulnerable customers, we have enhanced our Barclays' tools, training, support and systems, continuing to improve our ongoing support when customers need us the most. In July 2023 Barclays implemented support measures following the introduction of the Mortgage Charter by HMT. These measures provided residential mortgage customers, who are up to date with their payments, with a range of support options which included: • The ability to apply to extend the term of their mortgage to reduce their monthly payment amount . • Apply to switch their mortgage from repayment to interest only for a period of 6 months to temporarily reduce their monthly payment amount. Barclays continued a nationwide engagement campaign into 2023, providing practical support and guidance to the cost of living crisis. Launching at the end of 2022 and reaching across 254 local and national commercial radio stations; in print across 12 major national dailies and 26 major regional titles. In Q1/Q2 2023, the campaign extended with additional AV campaign across TV, cinema and VOD reaching 99% of our core audience with practical support and guidance. We delivered content targeted to the needs of our most vulnerable audiences with content across video, social media and owned channels. In the second half of the year, we launched new content marketing activity in collaboration with influencers to engage consumers around topics of everyday money management, travel and remortgaging. Guiding people on how to make money work better for them through the rising pressures of inflation, with this activity targeted at both low financial wellbeing and broader audiences. This was supported with marketing across our branches and locals that provided guidance on the benefits of the Barclays app to support with everyday money management and travel. Provided ongoing Cost of living support by proactively contacting over 1.38m customers with proactive SMS offering a conversation to provide support and guidance on managing their finances and offering them help ranging from budgeting to direct financial support, where required guiding them towards dedicated functions such as Barclays Financial Assistance (BFA) or external agencies such as Step Change. Providing knowledge and expertise through our colleagues with the aim to offer our customers more tools and features to educate them on managing their money, including by giving them guidance on how to use our digital platforms via the Digital Eagles, or supporting them in their understanding of financial products, how to build financial plans, and save money through budgeting via our Barclays Money Mentors®. Our early intervention strategies assess all customers who hold a retail product to determine if we think they would benefit from our support. These customer engagement strategies are bank-initiated and largely focused around proactive communications, based on sets of customer behavioural triggers, whilst we also support customers who initiate contact with us. Our primary focus is to support customers whose account behaviours are showing signs of possible early financial difficulty, and look to help customers maintain or regain control of their finances. + Further details can be found on page 39 in relation to Consumer Duty within the Strategic Report in Part 1 of the Annual Report Access to banking Customers are looking for more convenient, simpler ways to bank that fit their lives, including banking digitally: our mobile app has over 11.0 million active users. We are continuing to help deliver these solutions at pace. Alongside our investment in technology enabling digital customers to access tools and products whenever they need them, we’re aiming to transform the role of physical locations across the UK to ensure non digitally engaged customers can still access banking. We are working with other banks, the Post Office and LINK, to keep Barclays at the heart of the community. We have launched our own initiatives, including a cashback without purchase service and Barclays Local - the largest network of alternative branch formats in the UK, with a presence in over 300 locations. Alongside these changes, we are investing in multi-skilled training for our colleagues so they are better able to serve customers in ways that meet their needs today as well as breaking down internal barriers to enable quicker resolution of customer queries. + Further details on mobile banking vans and how to book an appointment can be found at: events.uk.barclays/barclaysvan/ Economic crime and scams We take our responsibility to protect our customers’ money very seriously and are proud to have one of the lowest scam rates and highest reimbursement rates in the industry. This is due to our continued investment in robust security systems and our established programme to educate customers and prevent them from falling victim to scams. We have a dedicated Fraud and Scams hub on the Barclays website, which hosts a variety of content and resources to help the public learn how to keep themselves safe. Additionally, for each of the 50 million+ payments our UK customers make every month, our fraud detection systems and machine learning models determine in less than a second if it is likely to be a fraudster rather than the customer, or if our customer appears at risk of being scammed. If the transaction seems risky, the customer is presented with additional checks prior to the payment being released. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 243 ESG Governance (continued) We continue to invest in security features that protect against fraud and scams, including ‘App ID’, which allows customers to verify they’re speaking to a Barclays colleague and not an impersonator. We are also part of the ‘Do not originate’ scheme, created in partnership with the telecommunications industry, UK Finance and Ofcom, to prevent our most common inbound helpline phone numbers from being used in a scam. We are proud signatories of the Contingent Reimbursement Model Code, providing measures to help prevent Authorised Push Payments scams taking place and building increased consumer protection standards for customers of signatory firms. We are founding members of Stop Scams UK, a cross-industry group made up of banks, telecoms and tech firms that have come together to seek to put an end to scams by collaborating, sharing best practices and engaging with the government and regulators to make it harder for scammers to operate. We have published a series of policy recommendations to tackle the spread of scams. If you suspect that you have been approached by fraudsters please tell the FCA using the share fraud reporting form at fca.org.uk/scams You can also call the FCA Helpline on 0800 111 6768 or through Action Fraud on 0300 123 2040 + Frontier Economics report on Tacking Fraud and Scams: home.barclays/news/press-releases/2023/08/eight- in-ten-brits-feel-unsafe-on-social-media-due-to- scammers/ Digital accessibility We aim to ensure that our digital services are easy to see, hear, understand and use for all customers, including those with disabilities. Collectively we seek to deliver digital services and workplace tools that promote disability inclusion and meet accessibility requirements set out in the Web Content Accessibility Guidelines (WCAG) 2.2 AA level. + barclays.co.uk/accessibility/statement/ The Barclays Accessibility statement Building financial wellbeing As part of our aim to deliver a world-class money management experience and help money work for our customers, particularly through the cost of living crisis, we are delivering more tools and features to educate them on managing their money. We are providing knowledge and expertise through our colleagues, whether that be helping customers to use our digital platforms via the Digital Eagles, or supporting customers in their understanding of financial products, to build financial plans, and save money through budgeting via our Barclays Money Mentors®. The Barclays Money Management Hub gives us the ability to provide proactive money management information directly to customers, giving them a better grasp on their spending behaviours and steps they can take to improve their financial wellbeing and provide customers greater control over their finances. We also have a range of early intervention strategies which aim to support customers whose account behaviours may be showing signs of lacking financial resilience. These strategies largely focus on pro- active communication with the customer, based on sets of customer behavioural triggers, and look to support customers to help them maintain or regain control of their finances. Where customers engage with these contact strategies, our BFA colleagues provide broad money management advice and, where appropriate, may suggest a range of solutions to manage their financial situation. This suite of solutions includes forbearance and non-forbearance options. Gambling Barclays understands that gambling and financial difficulty can often go hand in hand and that customers may sometimes find it hard to ask for help. We have dedicated training available for colleagues to help them understand and support customers impacted by problematic gambling. Our Specialist Colleagues are available to help customers in complex situations and sign post where needed to external support charities and organisations. + Further details can be found at: barclays.co.uk/gambling-support/ Domestic abuse To support customers impacted by domestic abuse, we have partnered with Refuge, a national charity providing specialist support for women and their children experiencing domestic abuse. This enables us to direct those impacted by domestic abuse to expert advice and assist survivors with the opening of bank accounts and gaining access to banking services in situations where they may not have the requisite documentation. In 2023, the Barclays Refuge Partnership was recognised at the Business Charity Awards for Addressing Economic and Tech Abuse. We are a committed signatory to the revised UK Finance Domestic Abuse Code of Practice, which sets out how participating banks and building societies should support customers who are victims and survivors of economic or financial abuse. Homelessness We continue to support those with limited documentation such as homeless people to open a basic current account. Barclays has partnered with charities to help those most impacted by the current environment through dedicated financial inclusion support. Bereavement We continue to prioritise making this extremely difficult time in people’s lives a little easier. Our programme of work to enhance the customer experience across all of our channels, including physical locations and online remains front of mind. Highlights this year, include: delivery of an automated, online bereavement notification and document upload capability and a new email confirmation, providing real time acknowledgment of the bereavement notification. We’ve also made it easier for colleagues to help customers needing probate support with a referral to Co-op Legal Services, who we have a partnership with. Further enhancements are planned for 2024. + Further details can be found at: barclays.co.uk/what-to-do-when-someone-dies/ notify-us/ Authorised users Since launching Authorised User in 2022, we’ve continued to give customers the ability to effectively manage their finances with support of other trusted persons. In October 2023, we’ve made this even easier by removing the monthly service fee for customers to add someone they trust to spend on their account. Further details can be found at: + barclays.co.uk/ways-to-bank/authorised-users/ manage-account/ Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 244 ESG Governance (continued) Specialist support team Basic current account We have a dedicated specialist team who receive in-depth training on a wide variety of vulnerable scenarios. They are available to support colleagues and customers in complex and heightened vulnerable circumstances. Accessibility & Vulnerability (A&V) Indicators Platform Over 2023 we have enhanced our Accessibility & Vulnerability framework, giving colleagues within Barclays the ability to record disclosed customer vulnerability on our systems. This allows us to provide customers with the correct level of service based on their particular needs and/or adjustments. We have focused on improving the colleague journey to include support on soft skills, internal & external sign posting and escalations to specialist teams. This ensures colleagues have the best available support in the moment when dealing with customers in vulnerable circumstances. Training for colleagues Over 20,000 Barclays UK colleagues completed the mandatory Customers in Vulnerable Circumstances annual e- learning modules. The training improves awareness and understanding of vulnerability for our frontline and head office colleagues. We also this year launched ‘Threat to Life’ training materials for our colleagues to help further support colleagues when liaising with customers who are suicidal. In addition we rolled out new induction training to equip new colleagues with how to identify and support customers who may be vulnerable or going through a life event. Barclays UK Performance Framework Within Barclays UK, the Performance Framework is in place to ensure a sustainable commercial performance. The framework looks to mitigate the risks of inappropriate practices, such as ensuring there is no undue pressure on colleagues to sell products, which can result in mis- selling. Alongside the Performance Framework we have introduced Performance Standards to set clear expectations, identify development opportunities, and deliver sustainable performance for our customers and clients. Since 2015, we have been offering our basic current account to individuals who may not be eligible for a standard account access to banking, including over the counter services, access to ATMs, and digital banking and free text alerts to manage finances. There were over 650,000 Barclays basic current accounts open at the end of 2023. Access to a transactional bank account enables consumers to benefit from bill reductions through paying by direct debit and access to cheaper goods and services on the internet, to help them along their financial journey. If their circumstances change, customers on the basic current account are able to apply for a standard Barclays current account at any time. Periodically we also review accounts to upgrade customers from Basic Current Account to Barclays Bank Account where eligible. Number of basic current accounts (#) 2023 2022 2021 Barclays mortgages and first-time buyers 2023 has been a year of change in the mortgages market. There were eight successive increases in the Bank of England Base Rate, which led to significant increases in the cost of borrowing for mortgage customers. Our commitment has remained to support customers through this period. In late 2022 we changed our policy for customers reaching the end of their fixed rate period, to allow them to rate switch earlier, helping over 200,000 customers in 2023 secure a new product up to 180 days in advance when their existing rate is ending. The Mortgage Charter mandated participating banks to implement 180 day switching in June 2023, by which time we had already been live with the 180 day switching for over eight months. Despite the challenges with the market in 2023, we still helped almost 22,000 first- time buyers get onto the property ladder. We have continued to support customers buying their first home with 95% loan-to- value mortgages through the UK Government Mortgage Guarantee Scheme, and Barclays Family Springboard Mortgage. The Mortgage Guarantee Scheme offers 95% LTV mortgages which are backed by a UK Government guarantee. Customers can apply for the scheme with a minimum deposit of 5% of the property purchase price, and it is available for first-time buyers and those looking to make their next move on the property ladder. Financial inclusion in our US consumer business The Community Reinvestment Act (CRA) is a US federal law designed to encourage financial institutions to help meet the needs of borrowers in all segments of their communities, including low and moderate- income neighbourhoods. Barclays meets the CRA requirement by supporting and investing in local Community Development Financial Institutions (CDFIs), small- medium businesses and non-profits. The success of CDFIs, small-medium businesses and non-profits are key to a thriving community. Barclays has predefined goals with specific performance targets that we must meet each year in order to be considered in compliance with CRA guidelines. Barclays has met its CRA goals for 2023, evidencing that we are continuing to invest in the communities where we live, work and serve. Barclays Bank Delaware (BBDE) is committed to fair and equitable treatment of all prospective and existing customers without regard to race, sex, colour, national origin, religion, age, marital status, disability, sexual orientation, military status, gender identity, familial status, Limited English Proficiency, receipt of public assistance income, and good faith exercise of rights under the Consumer Credit Protection Act. We believe Barclays’ core Values of Respect, Integrity, Service, Excellence, and Stewardship reflect our commitment to fair lending and fair treatment principles and practices. We strive to develop long- term relationships by providing products and services that meet prospective and existing customer needs, avoid causing prospective and existing customer detriment or harm, and place our prospective and existing customers' interests at the heart of our strategy, planning, and decision-making processes. 650,863661,991642,468Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 245 ESG Governance (continued) The Barclays Way The Barclays Way is our Code of Conduct. Together with more formal policies and practices, this provides a clear path towards achieving a positive and dynamic culture within the Group. Our commitment to being a responsible business includes seeking to ensure that: • we conduct ourselves in line with The Barclays Way, our Code of Conduct, to create the best possible working environment for our colleagues • we treat our customers fairly and the products and services we deliver are transparent and responsible • we operate in line with relevant laws and regulations including those applicable to financial crime • we safeguard the data that has been entrusted to us. Our Code of Conduct reflects the trust that millions of people place in us every day. We know that trust is earned by repeatedly doing the right thing. We believe the best way to build that trust is to invest in our culture and support our people in the choices they make every day, with guidance and policies that help them do this. That starts with our Purpose, Values and Mindset, and is locked into our organisation through The Barclays Way, the touchstone for everyone in Barclays on the standard of conduct we expect, setting an unequivocal tone from the top about who we are and what we stand for. The Barclays Way was launched in 2013, replacing a number of existing codes of conduct with a single document. Endorsed by our Chairman, it governs our way of working across our business globally and constitutes a reference point covering all aspects of colleagues’ working relationships, specifically but not exclusively with other Barclays employees, customers and clients, governments, regulators, business partners, suppliers, competitors and the broader community. It is aligned to the Code of Professional Conduct, published by the Chartered Banker Professional Standards Board, which sets out the ethical and professional attitudes and behaviours expected of bankers. Barclays subscribes to this code and is committed to embedding its broad principles into our business. The Barclays Way includes information and guidance on how employees are expected to behave and take personal accountability for making decisions. We apply a range of criteria, over and above financial considerations, aimed at building a sustainable, strong and profitable business for the long term and adding value to our business relationships and the broader communities in which we live and work. We provide guidance across all key stakeholder groups, including servicing our customers and clients, promoting respect, diversity and performance in the workplace and maintaining strong governance, robust controls and strict ethical standards. The Barclays Way also includes advice and guidance on speaking up and raising concerns. It is important for the success of Barclays, and for the safety and wellbeing of our customers, clients and colleagues, that we encourage a culture that supports speaking up when things aren’t as they should be. All colleagues are required to undertake training on The Barclays Way. We know that our success over the long term is based not just on how well we run the organisation commercially, but also on how well we manage it to protect the environment, support positive social progress and make responsible, well- governed decisions. We are focused on the areas where we can have the greatest long-term impact: making growth ‘green’, sustainable and inclusive; managing the environmental and social impacts of our business; running a responsible business; and investing in our communities. Employee survey results % "I believe that my team and I do a good job of role modelling the Values every day" 2023 2022 % of colleagues completing mandatory training on The Barclays Way 99%+ The Barclays Way Code of Conduct is available at: home.barclays/citizenship/the-way-we-do-business/ code-of-conduct/ “In challenging times such as these, it is more important than ever that we conduct ourselves in the right way. The Barclays Way sets out the standards of behaviour we should all aspire to in our professional lives. It is a guiding light for everyone in Barclays, helping us to make the right decisions every day.” 9492Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 246 ESG Governance (continued) None of the retaliation concerns closed in 2023 were substantiated. In addition, 54 actions arising from concerns raised in 2023 were implemented to address issues identified during the course of investigation concerns . This includes recommendations to enhance processes and controls. The Chair of the Group Board Audit Committee is the Group Whistleblowers’ Champion and the Chair of the Barclays Bank UK PLC (BBUKPLC) Board Audit Committee is the BBUKPLC Whistleblowers’ Champion. In 2023, Julia Wilson became the Group Whistleblowers’ Champion on her appointment as Chair of the Group Board Audit Committee. The Whistleblowers’ Champions have responsibility for ensuring and overseeing the integrity, independence and effectiveness of Barclays’ whistleblowing programme across their respective entities. Their oversight is supported by periodic impartial reviews and assurance of the whistleblowing process. Barclays also works with Protect, the UK Whistleblowing Charity. The whistleblowing programme has benchmarked highly under Protect’s best practice benchmark framework. Whistleblowing cases closed by region 60Cases closed in 2023 Whistleblowing cases opened by (top 4) categories 1 Breach of controls, process or other 2 Retaliation 3 Fraud 4 Market misconduct 5 5. Other 7 21 19 15 Whistleblowing We support a culture where colleagues feel safe to speak up. Barclays is committed to providing a respectful and inclusive environment to work in and colleagues are encouraged to speak up about actions and behaviours that have no place in the organisation. 83% of global respondents of the 2023 Your View survey said it was 'safe to speak up' at Barclays. Colleagues are encouraged to speak up directly to their management, Compliance, HR or Legal. However, where they do not feel comfortable using these avenues, the Raising Concerns process is available. The Raising Concerns team carefully assess concerns and refer them to the most appropriate team for review and, where appropriate, investigation. All concerns are taken seriously and managed sensitively and confidentially. Details about the Raising Concerns reporting channels are available both internally and externally. One of the channels to which concerns may be referred is the whistleblowing programme. Information about the whistleblowing programme is provided to colleagues globally, including through annual mandatory training. Whistleblowing relates to concerns which fall within the wider public interest. This may include a breach of our policies or procedures, breaches of law and regulation or other behaviour that harms or is likely to harm the reputation or financial wellbeing of the Group. Concerns assessed by Raising Concerns as whistleblowing are directed to a dedicated impartial team within the Compliance function. All whistleblowing concerns are taken seriously, and controls are in place to protect the confidentiality and identity of whistleblowers. Barclays has a zero-tolerance approach to retaliation against any whistleblower or any individual who has provided information as part of an investigation. Any act of retaliation by a colleague may result in disciplinary action, including dismissal. In 2023, the whistleblowing team received a total of 67 whistleblowing concerns including 19 retaliation concerns. 25% of whistleblowing concerns closed in 2023 were found to have some level of substantiation and other issues were identified in a further 38% of concerns. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 247 ESG Governance (continued) Tax Barclays supports a fair and transparent tax system. “We received the PwC Building Public Trust Award 2023 for Tax Reporting in the FTSE 350 (Multinationals) Group.” Barclays takes a responsible approach to tax. We have strong governance and risk management over tax risk and are committed to transparency around tax. We know that it is important for our investors, customers and clients, regulators, tax authorities and other stakeholders to understand our approach to tax and our tax contribution in the countries in which we operate. In recognition of the clear explanations we provide of our tax affairs and our responsiveness to both stakeholder interest and the continually changing tax transparency landscape, we received the PwC Building Public Trust Award 2023 for Tax Reporting in the FTSE 350 (Multinationals) Group. This award reflects the transparency of both our 2022 Country Snapshot and the tax reporting in our 2022 Annual Report. + For further details, see our Country Snapshot Report at: home.barclays/annualreport Taxes paid globally £2,505m Taxes paid globally £m n Corporation tax and withholding taxes n Employer payroll taxes n Irrecoverable VAT n Bank levy n Other taxes including business rates 2022 taxes paid globally £2,255m Tax contribution We continue to make substantial tax contributions across the jurisdictions in which we operate, both in terms of taxes paid and taxes collected. Our total tax contribution for 2023 was £5,899m. This includes taxes paid of £2,505m which represent a cost to us, and taxes collected on behalf of governments of £3,394m. Barclays was ranked as the sixth-largest UK taxpayer, in terms of taxes paid, in the most recent PwC Total Tax Contribution survey of the One Hundred Group (‘100 Group’). The 100 Group represents members of the FTSE 100 along with several large UK private companies. Over the last decade we have paid over £14bn of taxes in the UK alone. Approach to tax Barclays’ Purpose is to deploy finance responsibly to support people and businesses, acting with empathy and integrity, championing innovation and sustainability, for the common good and the long term. Our approach to taxation, also known as our tax strategy, is aligned with this Purpose as well as our Values of Respect, Integrity, Service, Excellence and Stewardship. Our approach to tax has three core objectives: • responsible approach to tax, • effective interaction with tax authorities and • transparency in relation to our tax affairs. We manage our tax affairs in accordance with our Tax Principles, Tax Code of Conduct and HMRC’s Code of Practice on Taxation for Banks and aim to file our returns on time and pay the correct amount of tax. We make clear disclosures to tax authorities and we are committed to only dealing with customer and client assets that have been appropriately declared to the relevant tax authority. We are also committed to being a leader in tax transparency. We have published details of the taxes we pay by country and our approach to tax since 2013, and have chosen to expand our external publications such as the Country Snapshot. Our Country Snapshot is publicly available, it sets out our approach to tax in detail, including our Tax Principles, and is reviewed and approved annually by the Barclays PLC Board. Key highlights from our approach to tax include: • we follow clear Tax Principles that we have published. These allow us to balance the needs of all our stakeholders and make clear that tax planning must support genuine commercial activity, • as a result of this approach, transactions which artificially transfer profits into a low tax jurisdiction would not be consistent with our Tax Principles, • we seek to comply with the spirit as well as the letter of the law and we take account of established practice in the territories in which we operate. We are transparent in both the disclosure of our tax affairs to tax authorities as well as our tax reporting to other stakeholders, and • we aim to comply with all of our tax obligations in the territories in which we operate and where there is uncertainty we may seek external tax advice in order to help ensure our tax filings are appropriate. Tax governance, control and risk management As a Global Systemically Important Bank, our Group-wide risk and governance procedures are subject to continuous review and scrutiny. More details on our approach to tax governance, control and risk management can be found in our Country Snapshot, the key highlights of which include: • our Board has ultimate responsibility for tax matters and the Board Audit Committee oversees our approach to tax, • at Barclays, risks are identified and managed through our ERMF, which supports the business in its aim to embed effective risk management and a strong risk management culture. Under the ERMF all risks, including tax risk, are managed in accordance with a ‘three lines of defence’ model, • as part of the ‘first line of defence’ the tax department identifies and manages tax risk by developing appropriate policies, standards and controls to apply across our organisation. Risk and Compliance comprise the ‘second line of defence’, and Barclays Internal Audit are the ‘third line of defence’, and these 83675562720978Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 248 ESG Governance (continued) functions review, challenge and provide assurance to the Board in relation to the effectiveness of governance, risk management and controls including those relating to tax risk, • we are subject to the Sarbanes-Oxley Act control requirements in relation to financial statements disclosures including those related to tax, • our tax department comprises appropriately qualified in-house professionals who are subject to clear standards including that they uphold our Tax Principles and follow our Tax Code of Conduct, which is an integral part of how we operate, • our governance requires that suitably qualified people are involved in decisions related to tax, tax is fully taken into account when making business decisions and tax risk is identified, assessed and kept under review, and • where we face significant uncertainty in relation to the application of tax law, we may seek to agree with the tax authority how the tax law should apply, • where relevant we seek to reach agreement with tax authorities using mechanisms available to all taxpayers including Advance Pricing Agreements and Mutual Agreement Procedures to clearly establish in which territories our profits should be taxed, • we engage with governments, tax authorities and NGOs through public consultations and other discussions to assist with the development of tax policy and the improvement of tax systems, and maintain our transparency with these stakeholders, and • we cooperate with tax authorities globally to reduce the scope for individuals and companies to evade tax, and have met all of our 2023 information reporting obligations under the Common Reporting Standard and Foreign Account Tax Compliance Act. + The BPLC Board Audit Committee is responsible for considering the Group's tax strategy and overseeing compliance with the Group's Tax Principles. Please refer to page 169 for details of BPLC Board Audit Committee oversight of tax related matters • we have no tolerance for tax evasion and have well-established mechanisms for raising concerns about unethical or unlawful behaviour through our ‘Whistleblowing’ policy, which applies equally to tax matters. Stakeholder engagement and management of concerns related to tax: Our reputation is very important to us and we take our external stakeholders’ expectations into account when we make decisions in relation to our tax affairs. More details on our approach to stakeholder engagement and managing stakeholder concerns related to tax can be found in our Country Snapshot, and key highlights include: • we believe that it is important to be transparent in the disclosure of our tax affairs both to tax authorities and stakeholders more broadly, • our dealings with tax authorities are handled proactively, constructively and transparently, in real-time where possible, • we recognise that early resolution of our tax affairs is in everyone’s interest. We have ongoing engagement with tax authorities to discuss their inquiries and material issues in relation to our tax affairs, and we respond to feedback from tax authorities, Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 249 ESG Governance (continued) Financial crime Barclays recognises that economic crimes have an adverse effect on individuals and communities wherever they occur. Endemic economic crime can threaten laws, democratic processes and basic human freedoms, impoverishing states and distorting free trade and competition. Barclays recognises that financial crime has an adverse effect on individuals and communities wherever it occurs. Endemic financial crime can threaten laws, democratic processes, and basic human freedoms, impoverishing states and distorting free trade and competition. Barclays is committed to conducting its global activities with integrity and respecting its regulatory, ethical, and social responsibilities to: a. Protect employees, customers, and others with whom we do business, and a. Support governments, regulators, and law enforcement in wider financial crime prevention. Barclays does not tolerate any deliberate breach of financial crime laws and regulations that apply to our business and the transactions we undertake. We have adopted a holistic approach to financial crime risk management and have one group-wide Financial Crime Policy. The Financial Crime Policy applies to all businesses, legal entities and employees. It is designed to ensure that Barclays has adequate systems, procedures, and controls in place to manage the risk of being used to facilitate financial crime and to manage the legal, regulatory, and reputational risks associated with financial crime. Employees are made aware that failure to comply with the Financial Crime Policy may give rise to disciplinary action, up to and including dismissal. The Financial Crime Policy sets control obligations to manage four key risks: anti- bribery & corruption (ABC); anti-money laundering & counter-terrorist financing (AML); anti-tax evasion facilitation (ATEF) and sanctions, including proliferation financing. This combined approach allows us to identify and manage relevant synergies and connections between these risks. Anti-Bribery & Corruption Anti-Tax Evasion Facilitation Bribery and corruption constitutes of: a. improperly obtaining or retaining business; and/or b. improperly securing a business or personal advantage; and/or c. inducing another person to perform their role in breach of an expectation of good faith, impartiality or trust. Barclays and its employees are prohibited from engaging in or facilitating any form of bribery and corruption (giving and receiving, directly or indirectly). The Financial Crime Policy contains the minimum risk-based control requirements that all our businesses, legal entities and employees must follow. The Financial Crime Policy is designed to ensure that Barclays’ employees know how to identify and manage the legal, regulatory and reputational risks associated with all forms of bribery and corruption. Anti-Money Laundering Money laundering has been identified as major threats to the international financial services community and therefore to Barclays. The Barclays Financial Crime Policy includes the requirement for Barclays businesses and legal entities to have adequate systems, procedures, and controls in place to manage the risk of Barclays being used to facilitate money laundering. The requirements of UK legislation apply to Barclays globally. As a transatlantic bank, the Financial Crime Policy also takes into account EU and US anti-money laundering requirements, as well as guidance issued by bodies such as the Wolfsberg Group and the European Banking Authority. Tax evasion is a financial crime and a predicate offence to money laundering in the UK and many other countries in which we operate. Barclays takes a zero- tolerance approach to deliberate facilitation of tax evasion in any country and has procedures in place to prevent it. We also expect the same from our employees and third parties providing services for or on our behalf. Barclays is committed to: a. dealing only with customers who have appropriately declared their assets to the relevant tax authorities; and b. preventing tax evasion facilitation by our employees or third parties acting for or on our behalf. Sanctions Sanctions are restrictions on activity with targeted countries, regions, governments, entities, individuals and industries that are imposed by bodies such as the European Union, the United Nations, groups of countries, or individual countries, such as the United Kingdom and the United States. In order to protect its reputation and other legitimate business interests, in certain circumstances Barclays sanctions risk appetite may be stricter than its legal obligations. The Financial Crime Policy is designed to ensure that Barclays and its employees know how to identify and manage the risks associated with sanctions, including the risk that activity is undertaken through Barclays in breach of sanctions regulations. + For further details of the Barclays approach to Financial Crime compliance and prevention, please see our Financial Crime Compliance Statement in the ESG Resource Hub at home.barclays/esg-resource- hub/reporting-and-disclosures/ Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 250 ESG Governance (continued) Health and Safety Barclays has a comprehensive Health and Safety Management System operating globally, which is independently certified to the international standard ISO45001 in the USA, UK, India, Singapore, Hong Kong and Japan. Barclays has a suite of Health and Safety (H&S) policies and standards that combine together under a single high-level statement of commitment endorsed by the Group ExCo. H&S policies are owned by three risk Horizontals – Premises, People and Physical Security. Each Horizontal manages specific hazards through the Group policies and standards, with quantitative targets set through key indicators (KIs) and control environment characteristics (CECs). A program of internal control testing ensures that our KIs and CECs continue to perform satisfactorily, and that any opportunity for improvement identified can be acted upon. Performance is reported on at the Group Health & Safety Forum which oversees effective management of health and safety across Barclays. Barclays has in place global risk assessments which identify the hazards and control measures needed to reduce risks to as low as reasonably practicable, these are underpinned by local regulatory requirements and procedures. The global risk assessments are published on the H&S intranet site. Measure Number of High or Exceptional Accidents Lost Time Incidents (per 100 employees) % Completion Mandatory Training Q1 2023 Q2 2023 Q3 2023 Q4 2023 0 0.023 0 0.02 0 0 0.024 0.025 99.9 % 99.9 % 99.9 % 99.9 % Barclays suppliers are subject to a supplier risk evaluation during onboarding, a minimum of annually thereafter and when they notify of a change in service delivery. In addition, they will complete an annual control obligation review. The Barclays H&S team, who operate globally, provide support, competent advice and assurance where required. There is a programme of H&S assurance and technical risk assessments to ensure the hazard and risk controls remain relevant and to identify emerging themes and trends. Onsite monitoring is undertaken across our portfolio by the Barclays H&S team, supported by the customer care leads for retail sites or by our building facilities management partners for corporate sites. Working with the Chief Security Office (CSO), there are processes and procedures in place to cover terrorism, disasters, fire and other emergency evacuations. These are tested on a programme schedule as required by the risk assessment or local regulatory requirements. Barclays has an incident reporting system to ensure incidents are recorded and investigated appropriately. Review of incident data is completed by each region to identify themes and trends, which are then reviewed at the Group H&S Forum and lessons learned shared. Incidents are reported and escalated as required by local regulatory statute and as per Barclays’ risk framework for risk issues and events. Information and knowledge is available through our H&S safety intranet, which provides key information on the hazard register, risk assessments, training and templates (for personal emergency evacuation plans, Display Screen Equipment (DSE) assessments, manual handling, occupational stress assessments, lone working assessments etc). Barclays operates a reward and recognition scheme where colleagues are recognised for improving our risk controls and supporting our health and safety management system. The Health and Safety Risk Management Framework over view is as follows: Leadership H&S Data Health and Safety Forum Statement of Commitment for Health and Safety Data: Performance against commitment Horizontal Premises People Physical Security Risks Harm to people through physical injury (excluding injuries caused by Physical Security related incidents) Harm to people related to mental health or mismanagement of employees impacting personal welfare L.3 Physical security incidents resulting in harm to staff or external parties L3 Policies Health and Safety (Premises & Infrastructure) Policy People Risk Health & Wellbeing Policy Group Physical Security Policy Standards Health and Safety (Premises & Infrastructure) Standard People Risk Health & Wellbeing Standard Group Physical Security Standard Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 251 ESG Governance (continued) Managing data privacy, security and resilience We have strict policies to protect privacy and keep data secure. Data privacy As we have transitioned to a more hybrid working model, we have educated colleagues on cybersecurity risks in order to help minimise the risk of data exploitation or leakage. Data resilience Barclays' CSO operates key controls that mitigate cybersecurity-related risks. CSO focuses on understanding internal and external threats and delivering on our capabilities to counteract them. As part of our efforts to continuously review and improve our response and recovery plans in preparation for evolving threats, Barclays works with industry bodies to learn from risk events in other organisations. Our teams use intelligence to create plausible cybersecurity and data compromise scenarios which we simulate to help us focus on continuous improvement. Most of the jurisdictions in which Barclays operates have privacy and data protection laws in effect. While these may vary in detail, generally they reflect internationally recognised privacy principles found in the UN’s Universal Declaration of Human Rights, the European Convention on Human Rights and the European Union’s Charter of Fundamental Rights. We strive to operate in accordance with these standards and recognise that respect for privacy rights is a key element of good corporate governance and social responsibility. We strive to be transparent about our use of personal information when delivering our products and services and acknowledge the responsibility we have for safeguarding privacy. As Barclays increasingly adopts digital solutions to deliver next-generation consumer financial services, we appreciate our clients, customers and others may wish to understand how this may impact the use of their personal information. A globally applicable Barclays Data Privacy Standard sets out what is expected of all Barclays businesses and functions when collecting, using and sharing personal information. To promote clear accountability, the Standard includes the requirement for each business to appoint an accountable executive who has ultimate responsibility for the processing of personal data within that business. An agreed assurance programme measures compliance with the Data Privacy Standard. Barclays colleagues must complete annual privacy training which is reviewed and refreshed each year, with additional tailored training provided as necessary. The Group Data Protection Officer (DPO) reports on data privacy issues to the highest level of management. Through customer and employee privacy notices, we endeavour to explain clearly and openly how and why we use personal information and the legal grounds we rely on. When we receive complaints we seek to address them fairly. Several jurisdictions also provide individuals with specific rights, such as the right to have access to or request deletion of their personal information. Barclays provides a public mailbox and secure channels via its website to enable individuals to make their privacy requests and receive responses from a dedicated team. Barclays requires its suppliers to comply with data protection and privacy laws, regulations and standards relevant to the jurisdictions in which they operate and relevant to any transferred personal data. Our requirements are set out and managed through the Barclays Supplier Control Obligations, available online, which look to provide assurance that all new and existing suppliers commit to ensuring personal data shared with them is safeguarded and respected throughout the supply chain. Data security Barclays deploys automated controls to protect its sensitive information and the data that has been entrusted to us by customers and clients, in line with our standards, taking into account findings from internal and external reviews of our controls. As Barclays accelerates the migration of digital services to the cloud, we apply the same design principles that underpin our existing control environment. We have controls and monitoring in place designed to secure cloud-hosted data and maintain its integrity. Barclays seeks to protect the security of data we share with third parties, including by conducting remote and on-site inspections with certain suppliers to review their controls against contractual obligations and industry standards. A Third Party Service Provider Framework is in place which sets out control requirements for business units to manage the operational, reputational, conduct and legal risks to Barclays through its supply chain. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 252 ESG Governance (continued) Operational resilience Chief Security Office Customers and clients have increased expectations for us to be ‘Always On’, and the interconnectivity of the financial sector means the stability and resilience of our systems, workforce and the continued provision of third-party services, all of which have a direct impact on the quality of our service. Barclays' CSO exists to keep the bank, its customers, clients, and colleagues safe and secure, and to maintain the resilience of our operations. CSO supports Barclays' business to operate in a protected and secure environment, and actively promotes the culture that security is everyone's responsibility. Resilience and Security is a focus for the board. Barclays continues to invest in a multi-year resilience programme which is focused on our ability to recover from ‘severe but plausible’ scenarios which could cause detriment to our customers and clients and the broader financial market. To enable this, we define Group- wide business services and their interdependencies across the Group, including technology, third-party services and our workforce, and develop the recovery plans and business response plans for disruption events, such as cyber or data integrity disruptions. We review and validate these recovery plans through regular testing which supports our aim to reduce the volume and impact of operational incidents year on year. We also conduct regular assurance on third parties to assess their capability, as defined by our contractual Information & Cyber Security Supplier Control Obligations. Resilience and security is the responsibility of everyone within the Group. All permanent employees are required to complete mandatory training on these topics at regular intervals across the year. Please refer to pages 178 for details of Barclays PLC + Board Risk Committee oversight relating to operational resilience. Please refer to the 'Material existing and emerging risks' section in our Risk review on pages 266 to 267 for further details on cyberattacks, data management and information protection. Please refer to the 'Supervision and regulation' section in our Risk review on pages 370 for further details on our regulatory approach to managing such risks. The Chief Security Officer for the Group heads Barclays' CSO and reports up through the Chief Operating Officer, who sits on the Group Executive Committee. The Group CISO reports directly to the Chief Security Officer and is supported by a team of CISOs for individual business units and jurisdictions, as well as other teams of cybersecurity experts and analysts. Barclays' Group Chief Security Officer combines 10 years of law enforcement experience with over 20 years of experience serving in senior leadership roles managing security at global financial institutions. The Group CISO and supporting leadership team collectively have advanced degrees and senior level experience managing security risks in a variety of sectors, including those that represent critical national infrastructure, such as telecommunications and peer financial institutions. They are supported by analysts and subject matter experts in a variety of specialisations, such as intelligence, penetration testing, cyberforensic investigations, security engineering, and vulnerability management. CSO leadership manages Barclays’ cybersecurity activities and is accountable for the day-to-day monitoring of residual risk, identification of gaps, oversight of remedial actions and implementation of strategy. As described below, the Chief Security Officer and CISO for the Group provide updates to the Board and Board Risk Committee about cybersecurity risks facing the Group. Within its oversight of Operational risk as a Principal Risk, the Board Risk Committee is responsible for oversight of risks arising from cybersecurity threats. As part of this oversight, the Board Risk Committee receives periodic updates from Barclays' Chief Security Officer or CISO for the Group on cybersecurity matters. In 2023, such updates addressed topics that included the shifting cybersecurity threat landscape, measurement of Barclays' risk and control posture, cybersecurity incident trends and Barclays' response, Barclays' ability to recover from a material cyberattack scenario, third party control and assurance monitoring, privileged access to Barclays' systems, regulatory developments, and Barclays' technology and resource investment strategy. Barclays assesses its cybersecurity activities against the industry-recognised National Institute of Standards and Technology (NIST) security maturity framework, and we periodically engage external security consultants to conduct independent benchmarking assessments. In 2023, findings from such an assessment conducted in late 2022 were briefed to the Board and Board Risk Committee. Barclays' CSO partners with third-party security providers throughout the Group's cybersecurity activities, including for cyber recovery, penetration testing, software vulnerability scanning, distributed denial of service (DDoS) attack prevention, phishing simulations, third-party risk management, incident response, intelligence, fraud prevention, and industry benchmarking. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 253 ESG Governance (continued) This is achieved through our own assurance capabilities and use of a third party assurance utility. Activity is structured on a risk-based approach that prioritises suppliers that underpin our most important business services. Identified issues are managed formally, but we also engage proactively with third-party suppliers to help them strengthen their security and resilience posture. To recognise the changing risk presented by third-party suppliers, which are increasingly targeted by threat actors, we regularly alert third-party suppliers where we anticipate that they may be more vulnerable and should take preventative action. Notwithstanding such third-party risk management efforts, Barclays does not have direct control over the cybersecurity of the systems of its third parties, limiting the Group’s ability to effectively protect and defend against certain threats. Certifications Barclays holds three ISO27001 certifications (i.e., the international standard on how to manage information security), Cyber Essentials / Cyber Essentials Plus Certification, and has a UK certification for Digital Banking. Under Barclays' Enterprise Risk Management Framework, there is an Information and Cyber Security Policy supported by ten Standards which define the minimum requirements for cybersecurity matters across the entire Barclays Group. These Standards cover the following topics: Cryptography, Network Security, Security Configuration, Data Loss Prevention, Vulnerability Management, Data Security, Incident Response & Threat Intelligence, Threat Management, Governance, and Identity & Access Management. An important part of Barclays’ cybersecurity environment is its Joint Operations Centres (JOCs), which operate 24x7x365 from three globally strategic locations, linking CSO’s security professionals and incident response managers with control functions and business unit representatives. The JOCs deliver security responsiveness by uniting core security functions and providing a central information and coordination point for security incident management. To manage security risk related to our third-party suppliers, many of which perform critical services for Barclays and handle sensitive Barclays data, we have a set of contractual Information & Cyber Security Supplier Control Obligations that are based off of the requirements of our internal standards. We conduct assurance over our third and fourth parties against those obligations through a dedicated External Cyber Assurance & Monitoring team (ECAM) and a set of control indicators. Reporting phishing CSO performs a number of key activities related to identifying, investigating, responding to and containing phishing / malicious email incidents. CSO has embedded an operational process that provides education and awareness content via email to colleagues who click a malicious link or attachment in a phishing email, with escalating training exercises and management interventions for repeated instances. To report suspected phishing to Barclays' JOC for further investigation, colleagues have a tool integrated into their email account, and colleagues receive feedback on whether the reported email was suspect or genuine. CSO also runs monthly phishing simulations to understand colleagues' susceptibility to real attacks, using the analysis to refine education and training. Training Barclays has adopted a 65-day window for mandatory training completion to allow colleagues sufficient time to complete training. The consequence of non- completion is a breach which can lead to disciplinary action and impact compensation. The 65-day window covers many different colleague situations, including new joiners, returners from sick leave or parental leave and internal movers. Some of these situations are required by law to have a reasonable adjustment time to enable the successful completion of training. This process is managed by Barclays HR and Compliance. Risk review The management of risk is a critical underpinning to the execution of Barclays’ strategy. The material risks and uncertainties the Group faces across its business and portfolios are key areas of management focus. Risk management strategy Overview of Barclays’ approach to risk management. A detailed overview together with more specific information on policies that the Group determines to be of particular significance in the current operating environment can be found in the Barclays PLC Pillar 3 Report 2023 or at barclays.com Material existing and emerging risks Insight into the level of risk across our business and portfolios, the material existing and emerging risks and uncertainties we face and the key areas of management focus. Enterprise Risk Management Framework (ERMF) Segregation of duties – the ‘Three Lines of Defence’ model Principal risks Risk appetite Risk committees Barclays’ risk culture Material existing and emerging risks potentially impacting more than one principal risk Climate risk Credit risk Market risk Treasury and Capital risk Liquidity risk Capital risk Interest rate risk in the banking book (IRRBB) Operational risk Tax risk Model risk Compliance risk Legal risk Page 256 256 257 257 257 257 258 262 263 265 265 265 265 266 266 268 269 269 270 Pillar 3 Report 106 106 106 107 109 111 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Principal risk management Barclays’ approach to risk management for each principal risk with focus on organisation and structure and roles and responsibilities. Climate risk management Credit risk management Market risk management Treasury and capital risk management Climate risk performance Credit risk performance Model risk management Operational risk management Compliance risk management Reputation risk management Legal risk management Carbon-related assets Elevated risk sectors Financing (capital markets) Credit risk Maximum exposure and effects of netting, collateral and risk transfer Expected Credit Losses Movement in gross exposures and impairment allowance including provisions for loan commitments and financial guarantees Management adjustments to models for impairment (audited) Measurement uncertainty and sensitivity analysis Analysis of the concentration of credit risk The approach to management and representation of credit quality Analysis of specific portfolios and asset types Forbearance Market risk performance Market risk overview and summary of performance Treasury and capital risk performance Treasury and Capital risk Operational risk performance Model risk performance Compliance risk performance Reputation risk performance Legal risk performance Supervision and regulation Capital risk overview and summary of performance Interest rate risk in the banking book Operational risk overview and summary of performance Operational risk profile Model risk overview Compliance risk overview Reputation risk overview Legal risk overview Page 272 276 278 278 280 280 281 282 283 284 284 287 291 293 295 Pillar 3 Report 116 119 153 171 184 180 187 189 191 N/A N/A N/A N/A N/A N/A 298 N/A 307 311 320 322 329 332 336 338 350 357 359 359 361 361 362 362 363 N/A N/A N/A N/A N/A N/A 92 N/A N/A N/A 102 104 N/A N/A N/A N/A N/A Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 256 Risk management Barclays’ risk management strategy This section introduces the Group’s approach to managing and identifying risks, and for fostering a sound risk culture. Enterprise Risk Management Framework (ERMF) are needed, and high level governance arrangements The ERMF outlines the highest level principles for risk management by setting out standards, objectives and key responsibilities of different groups of employees of the Group. It is approved by the Barclays PLC Board on recommendation of the Group Board Risk Committee and the Group Chief Risk Officer. The ERMF sets out: ▪ principal risks faced by the Group, which guide the organisation of risk management processes ▪ ▪ ▪ risk appetite requirements. This helps define the level of risk we are willing to undertake in our business risk management and segregation of duties: The ERMF defines a Three Lines of Defence model roles and responsibilities for key risk management and governance: The accountabilities of the Group CEO, Group CRO and other senior managers, as well as an overview of Barclays PLC committees. The ERMF is complemented by frameworks, policies and standards which are mainly aligned to individual principal risks: ▪ frameworks cover high level principles guiding the management of principal risks, and set out details of which policies Board Committees ▪ policies set out the control objectives and high level requirements to address the key principles articulated in their associated frameworks. Policies state ‘what’ those within scope are required to do ▪ standards set out the detail of the control requirements to ensure the control objectives set by the policies are met. Segregation of duties – the ‘Three Lines of Defence’ model The ERMF sets out a clear lines of defence model. All colleagues are responsible for understanding and managing risks within the context of their individual roles and responsibilities, as set out below. ▪ The first line comprises all employees engaged in the revenue-generating and client-facing areas of the Group and all associated support functions, including Finance, Operations, Treasury and Human Resources. The first line is responsible for identifying and managing the risks in which they are engaged, operating within applicable limits, and escalating risk events or issues as appropriate. Employees in the first line have primary responsibility for their risks and their activities are subject to oversight from the relevant parts of the second and third lines. ▪ The second line is comprised of the Risk and Compliance functions. The role of the second line is to establish the limits, rules and constraints, and the frameworks, policies and standards under which all activities shall be performed, consistent with the risk appetite of the Group, and to oversee the performance of the Group against these limits, rules and constraints. Controls for first line activities will ordinarily be established by the control officers operating within the control framework of the firm. These will remain subject to oversight by the second line. ▪ The third line of defence is Internal Audit, who are responsible for providing independent assurance over the effectiveness of governance, risk management and controls over current, systemic and evolving risks. ▪ The Legal function provides support to all areas of the bank and is not formally part of any of the three lines of defence, The Legal function is responsible for proactively identifying, communicating and providing legal advice on applicable laws, rules and regulations. Except in relation to the legal advice it provides or procures, it is subject to second line oversight with respect to its own operational and compliance risks, as well as with respect to the legal risk to which the bank is exposed. Barclays PLC Board Barclays PLC Board Risk Committee Barclays PLC Board Audit Committee Barclays PLC Board Remuneration Committee Group Remuneration Review Panel Management Level Committees/Forums Barclays Group ExCo Group Risk Committee Business Level Committees/Forums Barclays Risk Committees (aligned to product/risk type or business) Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 257 Risk management (continued) Principal risks • The Barclays PLC Board Risk Barclays’ risk culture Committee (BRC): the BRC monitors the Group’s risk profile against the agreed appetite. Where actual performance differs from expectations, the actions taken by management are reviewed to ascertain that the BRC is comfortable with them. The BRC also reviews certain key risk methodologies, the effectiveness of risk management, and the Group’s risk profile, including the material issues affecting each business portfolio and forward risk trends. The committee also commissions in-depth analysis of significant risk topics, which are presented by the Group CRO or senior risk managers. • The Barclays PLC Board Audit Committee (BAC): the BAC receives regular reports on the effectiveness of internal control systems, quarterly reports on material control issues of significance, quarterly papers on accounting judgements (including impairment), and a quarterly review of the adequacy of impairment allowances. • The Barclays PLC Board Remuneration Committee (RemCo): the RemCo receives proposals on ex-ante and ex- post risk adjustments to variable remuneration based on risk management performance including events, issues and the wider risk profile. These inputs are considered in the setting of performance incentives. The terms of reference and additional details on membership and activities for each of the principal Board committees are available from the corporate governance section of the Barclays website at: home.barclays/who-we-are/ our-governance/board-committees/ The GRC is the most senior executive body responsible for reviewing and monitoring the risk profile of the Group. This includes coverage of all principal risks, and any other material risks, to which the Group is exposed. The GRC reviews and recommends the proposed risk appetite and relative limits to the BRC. The committee covers all business units and legal entities of the Group and incorporates specific coverage of Barclays Bank Group. Risk culture can be defined as the norms, attitudes and behaviours related to risk awareness, risk taking and risk management. This is reflected in how the Group identifies, escalates and manages risk matters. Barclays is committed to maintaining a robust risk culture in which: • management expect, model and reward the right behaviours from a risk and control perspective • colleagues identify, manage and escalate risk and control matters, and meet their responsibilities around risk management. The Group CEO works with the Executive Management to embed a strong risk culture within the firm, with particular regard to the identification, escalation and management of risk matters, in accordance with the ERMF. This is supported by our Purpose, Values and Mindset, as well by as by setting a standard of consistent excellence. Specifically, all employees regardless of their positions, functions or locations must play their part in the Group’s risk management. Employees are required to be familiar with risk management policies which are relevant to their responsibilities, know how to escalate actual or potential risk issues, and have a role-appropriate level of awareness of the risk management process as defined by the ERMF. Our Code of Conduct – the Barclays Way Globally, all colleagues must attest to the ‘Barclays Way’, our Code of Conduct, and comply with all frameworks, policies and standards applicable to their roles. The Code of Conduct outlines the Purpose, Values and Mindset which govern our ‘Barclays Way’ of working across our business globally. It constitutes a reference point covering all aspects of colleagues’ working relationships, and provides guidance on working with other Barclays employees, customers and clients, governments and regulators, business partners, suppliers, competitors and the broader community. See home.barclays/sustainability/esg- resource-hub/statements-and-policy- positions/ for more details. The ERMF identifies nine principal risks namely: credit risk, market risk, treasury and capital risk, climate risk, operational risk, model risk, compliance risk, reputation risk and legal risk. Note that "compliance risk" replaced "conduct risk" in 2023 with an expanded definition. See page 269 for more information. Each of the principal risks is overseen by an accountable executive within the Group who is responsible for overseeing and/or assigning responsibilities for the framework, policies and standards that set out associated responsibilities and expectations and detail the related requirements around risk management. In addition, certain risks span across more than one principal risk. Risk appetite Risk appetite is defined as the level of risk which the Group is prepared to accept in carrying out its activities. It provides a basis for ongoing dialogue between management and Board with respect to the Group’s current and evolving risk profile, allowing strategic and financial decisions to be made on an informed basis. Risk appetite is approved by the Barclays PLC Board in aggregate and disseminated across legal entities and businesses, supported by limits to enable and control specific exposures and activities that have material concentration risk implications. Risk committees Barclays various risk committees consider risk matters relevant to their business, and escalate as required to the Group Risk Committee (GRC), whose Chair, in turn, escalates to the Barclays PLC Board Risk Committees and the Barclays PLC Board. In addition to setting the risk appetite of the Group, the Board is responsible for approving the ERMF, and reviewing reputation risk matters. It receives regular information on the risk profile of the Group, and has ultimate responsibility for risk appetite and capital plans. Further, there are two Board-level committees which oversee the application of the ERMF and implementation of key aspects, the Barclays PLC Board Risk Committee (BRC) and the Barclays PLC Board Audit Committee (BAC). Additionally, the Barclays PLC Board Remuneration Committee oversee pay practices focusing on aligning pay to sustainable performance. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 258 Material existing and emerging risks Material existing and emerging risks to the Group’s future performance The Group has identified a broad range of risks to which its businesses are exposed. Material risks are those to which senior management pay particular attention and which could cause the delivery of the Group’s strategy, results of operations, financial condition and/or prospects to differ materially from expectations. Emerging risks are those which have unknown components, the impact of which could crystallise over a longer time period. In addition, certain other factors beyond the Group’s control, including escalation of global conflicts, acts of terrorism, natural disasters, pandemics and similar events, although not detailed below, could have a similar impact on the Group. Material existing and emerging risks potentially impacting more than one principal risk i) Business conditions, general economy and geopolitical issues The Group’s operations are subject to changes in global and local economic and market conditions, as well as geopolitical developments, which may have a material impact on the Group’s business, results of operations, financial condition and prospects. A deterioration in global or local economic and market conditions may result in (among other things): (i) deteriorating business, consumer or investor confidence and lower levels of investment and productivity growth, which in turn may lead to lower customer and client activity, including lower demand for borrowing; (ii) higher default rates, delinquencies, write- offs and impairment charges as borrowers struggle with their debt commitments; (iii) subdued asset prices, which may impact the value of collateral held by the Group and require the Group and its customers to post additional collateral in order to satisfy margin calls; (iv) mark-to-market losses in trading portfolios resulting from changes in factors such as credit ratings, share prices and solvency of counterparties; and (v) revisions to calculated ECLs leading to increases in impairment allowances. In addition, the Group’s ability to borrow from other financial institutions or raise funding from external investors may be affected by deteriorating economic conditions and market disruption. Geopolitical events can also cause financial instability and affect economic growth. In particular: • Global GDP growth in 2023 was severely hampered by inflationary pressures resulting from: (i) restricted labour markets, industrial disputes, and upward pressure on employment costs; (ii) high energy prices intensified by the conflicts in Ukraine and the Middle East; and (iii) resilient consumer spending, particularly on services, funded by drawing household savings. High inflation has led to the on-going 'cost of living' pressures in much of the world, including in the UK. • In response to persistent inflation, 2023 saw central banks continue to tighten monetary policy through raising interest rates and exercising quantitative tightening. While markets are forecasting that rates are at or near their cycle peak and inflation has begun to ease back (albeit remaining well above central banks' targets), economies in which the Group operates are vulnerable to recession risk in 2024. Such risk is heightened by the turbulent geopolitical outlook and volatile market conditions with these factors acting as a drag on potential global economic growth. Higher mortgage rates, rising taxes, elevated bond yields, depleted household savings, higher corporate insolvencies, and rising unemployment have potentially negative implications for the Group's performance, including increased impairment allowances. • The loss of ‘the presumption of compliance’ is widely reported to have raised costs for UK customers exporting to the European Union (EU) which, together with the risk of regulatory divergence between the UK and the EU, could adversely impact both the Group's EU and UK operations. • Further, any trading disruption between the EU and the UK may have a significant impact on economic activity in the EU and the UK which, in turn, could have a material adverse effect on the Group’s business, results of operations, financial condition and prospects. • Unstable economic conditions could result in (among other things): – a deeper slowdown in the UK and/or one or more member states of the EU in which the Group operates, with lower growth, higher unemployment and a greater fall in property prices, which could lead to increased impairments in relation to a number of the Group’s portfolios (including, but not limited to, the UK mortgage portfolio, unsecured lending portfolio (including credit cards) and commercial real estate exposures). – increased market volatility (in particular in currencies and interest rates), which could impact the Group’s trading book positions and affect the underlying value of assets in the banking book and securities held by the Group for liquidity purposes. In addition, depositor perceptions of banking fragility as seen in certain institutions in 2023 could increase the severity and velocity of deposit outflows, impacting the Group’s liquidity position; – a credit rating downgrade for one or more members of the Group (either directly or indirectly as a result of a downgrade in the UK sovereign credit ratings), which could significantly increase the Group’s cost of funding and/or reduce its access to funding, widen credit spreads and have a material adverse impact on the Group’s interest margins and liquidity position and/or – a market-wide widening of credit spreads or reduced investor appetite for the Group’s debt securities, which could negatively impact the Group’s cost of and/or access to funding. • A significant proportion of the Group’s portfolio is located in the US, including a major credit card portfolio and a range of corporate and investment banking exposures. Political instability and/or increased polarisation ahead of the 2024 elections together with the possibility of significant changes in US policy in certain sectors may negatively impact the Group’s associated portfolios. Stress in the US economy, weakening GDP and associated exchange rate fluctuations, heightened political and/or trade tensions (such as between the US and China), and increased unemployment could lead to higher levels of impairment, which may have a material adverse effect on the Group's results of operations and profitability. • An escalation in geopolitical tensions or increased use of protectionist measures (such as the US and China implementing reciprocal trade tariffs and/or outright export bans on specific products and/or in specific sectors) may have a material adverse effect on the Group’s business in the affected regions. • In China, a significant global economy, the property market slump, shrinking exports, and weakened currency (and resulting capital outflows) have caused Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 259 Material existing and emerging risks (continued) an economic slowdown, with deflation a real risk. The high levels of debt, particularly in the property sector, remain a concern given the high leverage multiples, despite government and regulatory action. Any property shock risks contaminating the financial sector and precipitating a wider banking crisis. A shift away from market-based reforms towards state led initiatives to stimulate the economy could damage private-sector confidence and economic growth. • High US interest rates and a potential global slow-down in demand for natural resources, means an economic deterioration in emerging markets still remains a risk. This could have a material adverse effect on the Group's results from operations if these stresses lead to higher impairment charges from a deterioration in sovereign or corporate creditworthiness. • New strains of COVID-19 (or reduced vaccine efficacy) could impact the Group's ability to conduct business in the jurisdictions in which it operates through disruptions to: (i)) infrastructure and supply chains, (ii) business processes and technology services provided by third parties and (iii), the availability of staff due to illness. These interruptions to business may be detrimental to customers (who may seek reimbursement from the Group for costs and losses incurred as a result of such interruptions), and result in potential litigation costs (including regulatory fines, penalties and other sanctions), as well as reputational damage. It may also have the effect of increasing the likelihood and/or magnitude of other risks described herein (with consequential impairment charge volatility) or may pose other risks which are not presently known to the Group or not currently expected to be significant to the Group’s profitability, capital and liquidity. Any and all such events mentioned above could have a material adverse effect on the Group’s business, results of operations, financial condition, prospects, liquidity, capital position and credit ratings (including potential credit rating agency changes of outlooks or ratings), as well as on the Group’s customers, employees and suppliers. ii) The impact of interest rate changes on the Group’s profitability Changes to interest rates are significant for the Group, especially given the uncertainty as to the size and frequency of such changes, particularly in the Group’s main markets of the UK, the US and the EU. Interest rate rises result in higher funding costs either due to higher refinancing costs or due to deposit balance mix changes as customers prefer higher rate deposits. Interest rate rises however could positively impact the Group’s profitability as retail and corporate business net interest income increases due to margin decompression, as observed for the interest rate rises in 2023. However, increases in interest rates, if larger or more frequent than expected, could lead to generally weaker than expected growth, reduced business confidence and higher unemployment. This, combined with the impact interest rate rises may have on the affordability of loan arrangements for borrowers (especially when combined with inflationary pressures), could cause stress in the lending portfolio and underwriting activity of the Group. This could result in higher credit losses driving increased impairment charges which would most notably impact retail unsecured portfolios and wholesale non-investment grade lending and could have a material effect on the Group’s business, results of operations, financial condition and prospects. Interest rate cuts may affect, and put pressure on, the Group’s net interest margins (the difference between its lending income and borrowing costs) and could adversely affect the profitability and prospects of the Group. In addition, changes in interest rates could have an adverse impact on the value of the securities held in the Group’s liquid asset portfolio. Consequently, this could create more volatility than expected through the Group’s fair value through other comprehensive income (FVOCI) reserve and could adversely affect the profitability and prospects of the Group. iii) Competition in the banking and financial services industry The Group operates in a highly competitive environment in which it must evolve and adapt to significant changes as a result of regulatory reform, technological advances, increased public scrutiny, prevailing market environment and changes to economic conditions. The Group expects that competition in the financial services industry will continue to be intense and may have a material adverse effect on the Group’s future business, results of operations, financial condition and prospects. New competitors in the financial services industry continue to emerge. Technological advances and the growth of e-commerce have made it possible for non-banks to offer products and services that traditionally were banking products such as electronic securities trading, payments processing and online automated algorithmic-based investment advice. Furthermore, payments processing and other services could be significantly disrupted by technologies, such as blockchain (used in cryptocurrency systems) and 'buy now pay later' lending, both of which are currently subject to lower levels of regulatory oversight compared to many activities undertaken by banks. Furthermore, the introduction of central bank digital currencies could have significant impact on the banking system and the role of commercial banks by disrupting the current provision of banking products and services. This disruption could allow new competitors, some previously hindered by banking regulation (such as certain FinTechs), to provide customers with access to banking facilities and increase the disintermediation of banking services. New technologies and changing consumer behaviour have previously required, and could continue to require, the Group to incur additional costs to modify or adapt its products or make additional capital investments in its businesses to attract and retain clients and customers or to match products and services offered by its competitors, including technology companies. Ongoing or increased competition and/or disintermediation of banking services may put pressure on the pricing of the Group’s products and services, which could reduce the Group’s revenues and profitability, or may cause the Group to lose market share, particularly with respect to traditional banking products such as deposits, bank accounts and mortgage lending. This competition may be on the basis of the quality and variety of products and services offered, transaction execution, innovation, reputation and/or price. These factors may be exacerbated by further industry wide initiatives to address access to banking. The failure of any of the Group’s businesses to meet the expectations of clients and customers, whether due to general market conditions, underperformance, a decision not to offer a particular product or service, branch closures, changes in client and customer expectations or other factors, could affect the Group’s ability to attract or retain clients and customers. Any such impact could, in turn, reduce the Group’s revenues. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 260 Material existing and emerging risks (continued) iv) Regulatory change agenda and impact on business model The Group’s businesses are subject to ongoing regulation and associated regulatory risks, including the effects of changes in the laws, regulations, policies, voluntary codes of practice and interpretations of the foregoing in the UK, the US, the EU and the other markets in which it operates. Many regulatory changes that are relevant to the Group’s business may have an effect beyond the country in which they are enacted, either because the Group’s regulators deliberately enact regulation with extra- territorial effect or its global operations mean that the Group gives effect to local laws and regulations on a wider basis. In recent years, regulators and governments have focused on reforming both the prudential regulation of the financial services industry and the ways in which the business of financial services is conducted. Measures taken include enhanced capital, liquidity and funding requirements, the structural separation or prohibition of certain activities by banks, changes in the operation of capital markets activities, the introduction of tax levies and transaction taxes, changes in compensation practices and more detailed requirements on how business is conducted and customers are treated. The governments and regulators in the UK, the US, the EU or elsewhere may intervene further in relation to areas of industry risk already identified, or in new areas, which could adversely affect the Group. Current and anticipated areas of particular focus for the Group’s regulators, where regulatory changes could have a material effect on the Group’s business, financial condition, results of operations, prospects, capital position, and reputation, include, but are not limited to: • the increasing focus by regulators, international bodies, organisations and unions on how institutions conduct business, particularly with regard to the delivery of fair outcomes for customers, promoting effective competition in the interests of consumers and ensuring the orderly and transparent operation of global financial markets, including the new Consumer Duty in the UK and measures resulting from ongoing thematic reviews into the workings of the retail, small and medium enterprises and wholesale banking sectors and the provision of financial advice to consumers; • the implementation of any conduct • the incorporation of climate change measures as a result of regulators’ focus on organisational culture, employee behaviour and whistleblowing; • the demise of certain benchmark interest rates and the transition to new risk-free reference rates (as discussed further under ‘v) Impact of benchmark interest rate reforms on the Group’ below); • reviews of regulatory frameworks applicable to the wholesale financial markets, including reforms and other changes to conduct of business, listing, securitisation and derivatives related requirements; • the focus globally on technology adoption and digital delivery, including the use of artificial intelligence (AI), digital assets and digital money (including central bank digital currencies), financial technology risks, payments and related infrastructure, operational resilience, and cybersecurity. This also includes the introduction of new and/or enhanced regulatory standards in these areas, underpinned by customer protection principles; • increasing regulatory expectations of firms around governance and risk management frameworks, particularly for the management of climate change and other ESG risks, enhanced ESG disclosure and reporting obligations, and proposals for a new regulatory framework on diversity and inclusion in the UK; • the continued evolution of the UK’s regulatory framework following the UK's withdrawal from the EU, particularly following the introduction of the Financial Services and Markets Act 2023 (FSMA 2023) which provides for the revocation of retained EU law relating to financial services and the UK financial services regulatory reform agenda announced in December 2022, and similarly regarding the access of UK and other non-EU financial institutions to EU markets; • the implementation of the reforms to the Basel III package, which includes changes to the RWA approaches to credit risk, market risk, counterparty risk, operational risk, and credit valuation adjustments and the application of RWA floors and the leverage ratio; • the implementation of more stringent capital, liquidity and funding requirements; within the global prudential framework, including the transition risks resulting from a shift to a low-carbon economy and its financial effects; • the increased regulatory focus in the UK on the introduction of potential measures designed to maximise access to cash for consumers (including retention of specific branches) and, separately, regulatory scrutiny of the reasons for refusing to open or decisions to close customer bank accounts; • proposed reforms to the UK ring- fencing regime, which requires the separation of core banking operations for retail and small and medium enterprise depositors from other wholesale and investment banking operations; • the reform of corporate criminal liability in the Economic Crime and Corporate Transparency Act 2023, which includes a failure to prevent fraud offence; • requirements to detail management accountability within the Group (for example, the requirements of the Senior Managers and Certification Regime in the UK and similar regimes elsewhere that are either in effect or under consideration/implementation), as well as requirements relating to executive remuneration; • changes in national or supra-national requirements regarding the ability to offshore or outsource the provision of services and resources or transfer material risk or data to companies located in other countries, which could impact the Group’s ability to implement globally consistent and efficient operating models; • financial crime, fraud and market abuse standards and increasing expectations for related control frameworks, to ensure firms are adapting to new threats and are protecting customers from cyber-enabled crime and in the UK, reforms relating to authorised push payment fraud reimbursements; • the application and enforcement of economic sanctions including those with extra-territorial effect and those arising from geopolitical tensions; • requirements flowing from arrangements for the resolution strategy of the Group and its individual operating entities that may have different effects in different countries; Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 261 Material existing and emerging risks (continued) • the increasing regulatory expectations and requirements relating to various aspects of operational resilience, including an increasing focus on the response of institutions to operational disruptions and reviews of the role of critical third party providers; • continuing regulatory focus on data privacy, including the collection and use of personal data, and protection against loss and unauthorised or improper access; • the regulatory focus on policies and procedures for identifying and managing cybersecurity risks, cybersecurity governance and the corresponding disclosure and reporting obligations; and • continuing regulatory focus on the effectiveness of internal controls and risk management frameworks, as evidenced in regulatory fines and other measures imposed on the Group and other financial institutions. + For further details on the regulatory supervision of, and regulations applicable to, the Group, refer to the Supervision and regulation section on page 363. v) Impact of benchmark interest rate reforms on the Group Global regulators have driven international efforts to reform benchmarks and indices, used to determine the amounts payable under a wide range of transactions to increase reliability and robustness. These reforms have resulted in significant changes to the methodology and operation of certain benchmarks and indices, the adoption of alternative risk- free reference rates (RFRs), the discontinuation of certain benchmarks, and the introduction of implementing legislation and regulations. Specifically, certain London Interbank Offered Rate (LIBOR) tenors either ceased at the end of 2021 or became permanently unrepresentative, with synthetic 3-month GBP LIBOR ceasing to be published at the end March 2024 and synthetic 1-, 3- and 6-month USD LIBOR settings intended to cease being published at the end of September 2024. Notwithstanding these developments, given the unpredictable consequences of benchmark reform, any of these developments could have an adverse impact on market participants, including the Group, in respect of any financial instruments linked to, or referencing, any of these benchmarks. Uncertainty associated with such potential changes, including the availability and/or suitability of alternative RFRs, the participation of customers and third party market participants in the transition process, challenges with respect to required documentation changes, and the impact of legislation to deal with certain legacy contracts that cannot convert into or add fall-back RFRs before cessation of the benchmark they reference, may adversely affect a broad range of transactions (including any securities, loans and derivatives which use an affected benchmark to determine an amount payable which are included in the Group’s financial assets and liabilities) that use these benchmarks and indices, and present a number of risks for the Group, including but not limited to: • Compliance risk: in undertaking actions to transition away from using certain benchmarks to new alternative RFRs, the Group faces conduct risks. These may lead to customer complaints, regulatory sanctions or reputational impact if the Group is considered to be (among other things): (i) undertaking market activities that are manipulative or create a false or misleading impression; (ii) misusing sensitive information or not identifying or appropriately managing and mitigating conflicts of interest; (iii) providing customers with inadequate advice, misleading information, unsuitable products or unacceptable service; (iv) not taking a consistent approach to remediation for customers in similar circumstances; (v) unduly delaying the communication and migration activities in relation to client exposures, leaving them insufficient time to prepare; or (vi) colluding or inappropriately sharing information with competitors. • Litigation risk: members of the Group may face legal proceedings, regulatory investigations and/or other actions or proceedings regarding (among other things): (i) the conduct risks identified above, (ii) the interpretation and enforceability of provisions in contracts and securities linked to a relevant benchmark, and (iii) the Group’s preparation and readiness for the replacement of benchmarks which have ceased or will shortly cease to be published with alternative RFRs. • Financial risk: the valuation of certain of the Group’s financial assets and liabilities may change. Moreover, transitioning to alternative RFRs may impact the ability of members of the Group to calculate and model amounts receivable by them on certain financial assets and determine the amounts payable on certain financial liabilities (such as debt securities issued by them) because certain alternative RFRs (such as the Sterling Overnight Index Average (SONIA) and the Secured Overnight Financing Rate (SOFR)) are look-back rates, which means that the amount of interest payable is only known after the period has finished because it is calculated by reference to observed historical rates. In contrast, forward- looking term rates (such as LIBOR) allow borrowers to calculate at the start of any interest period exactly how much is payable at the end of such interest period. This may have a material adverse effect on the Group’s cash flows. • Pricing risk: changes to existing benchmarks and indices, discontinuation of any benchmarks or index and transition to alternative RFRs may impact the pricing mechanisms used by the Group on certain transactions. • Operational risk: changes to existing benchmarks and indices, the discontinuation of any benchmark or index and transition to alternative RFRs may require changes to the Group’s IT systems, trade reporting infrastructure, operational processes, and controls. In addition, if any benchmark or index is no longer available to calculate amounts payable, the Group may incur expenses in amending documentation for new and existing transactions and/or effecting the transition from the original benchmark or index to a new one. • Accounting risk: an inability to apply hedge accounting in accordance with IAS 39 could lead to increased volatility in the Group’s financial results and performance. Any of these factors may have a material adverse effect on the Group’s business, results of operations, financial condition, prospects and reputation. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 262 Material existing and emerging risks (continued) vi) Change delivery and execution risks The Group constantly adapts and transforms the way it conducts business in response to changing customer behaviour and needs, technological developments, regulatory expectations, increased competition and cost management initiatives. Accordingly, effective management of transformation projects is required to successfully deliver the Group's strategic priorities, involving delivering both on externally driven programmes, as well as key business initiatives to deliver revenue growth, product enhancement and operational efficiency outcomes. The magnitude, complexity and, at times, concurrent demands of the projects required to meet these priorities can result in heightened execution risk. The ability to execute the Group’s strategy may be limited by operational capacity and the increasing complexity of the regulatory environment in which the Group operates. In addition, whilst the Group continues to pursue cost management initiatives, they may not be as effective as expected and cost saving targets may not be met. The failure to successfully deliver or achieve any of the expected benefits of these strategic initiatives and/or the failure to meet customer and stakeholder expectations could have a material adverse effect on the Group’s business, results of operations, financial condition, customer outcomes, prospects and reputation. vii) Holding company structure of Barclays PLC and its dependency on distributions from its subsidiaries Barclays PLC is a holding company and its principal sources of income are, and are expected to continue to be, distributions (in the form of dividends and interest payments) from operating subsidiaries which also hold the principal assets of the Group. As a separate legal entity, Barclays PLC relies on such distributions in order to be able to meet its obligations as they fall due (including its payment obligations with respect to its debt securities) and to create distributable reserves for capital distributions (such as dividends to ordinary shareholders and share buybacks). The ability of Barclays PLC’s subsidiaries to pay dividends and interest and Barclays PLC’s ability to receive such distributions from its investments in its subsidiaries and other entities will be subject not only to the financial performance of such subsidiaries and entities and prevailing macroeconomic conditions but also to applicable local laws, capital regulations (including internal MREL requirements) and other restrictions (including restrictions imposed by governments and/or regulators, which limit management’s flexibility in managing the business and taking action in relation to capital distributions and capital allocation). These laws and restrictions could limit the payment of dividends and distributions to Barclays PLC by its subsidiaries and any other entities in which it holds an investment from time to time, which could restrict Barclays PLC’s ability to meet its obligations and/or to make capital distributions (such as dividends to ordinary shareholders and share buybacks). viii) Application of resolution measures and stabilisation powers under the UK Banking Act Under the UK Banking Act 2009, as amended (Banking Act), substantial powers are granted to the Bank of England (or, in certain circumstances, HM Treasury), in consultation with the PRA, the FCA and HM Treasury, as appropriate, as part of the UK's special resolution regime (SRR). These powers enable the relevant UK resolution authority to implement resolution measures and stabilisation options with respect to a UK bank or investment firm and certain of its affiliates (currently including Barclays PLC) (each, a relevant entity) in circumstances in which the relevant UK resolution authority is satisfied that the resolution conditions are met. The SRR consists of five stabilisation options: (i) private sector transfer of all or part of the business or shares of the relevant entity; (ii) transfer of all or part of the business of the relevant entity to a ‘bridge bank’ established by the Bank of England; (iii) transfer to an asset management vehicle wholly or partly owned by the Bank of England; (iv) the cancellation, transfer or dilution of the relevant entities’ equity (including Barclays PLC’s ordinary share capital) and write- down or conversion of the relevant entity’s capital instruments and liabilities (the bail- in tool); and (v) temporary public ownership (i.e. nationalisation). In addition, the relevant UK resolution authority may, in certain circumstances, in accordance with the Banking Act require the permanent write-down or conversion into equity of any outstanding Tier 1 capital instruments, Tier 2 capital instruments and internal MREL prior to, or together with, the exercise of any stabilisation option. Any such action could result in the dilution, transfer or cancellation of Barclays PLC’s ordinary share capital, restrict Barclays PLC’s ability to meet its obligations and/or to pay dividends to ordinary shareholders. Shareholders should assume that, in a resolution situation, public financial support will only be available to a relevant entity as a last resort after the relevant UK resolution authorities have assessed and used, to the maximum extent practicable, the resolution tools, including the bail-in tool (the Bank of England’s preferred approach for the resolution of the Group is a bail-in strategy with a single point of entry at Barclays PLC). The exercise of any of such powers under the Banking Act or any suggestion of any such exercise could materially adversely affect the value of Barclays PLC ordinary shares and could lead to shareholders losing some or all of their investment. The ‘no creditor worse off’ safeguard within the Banking Act requires that no shareholder or creditor must be left worse off from the use of resolution powers than they would have been if the relevant entity entered insolvent liquidation. Whilst shareholders may be entitled to compensation where there is determined to have been a shortfall following a valuation, there can be no assurance that shareholders would recover any such compensation promptly or that such compensation will be equivalent to the full losses incurred in resolution. Material existing and emerging risks impacting individual principal risks i) Climate risk Climate risk is the impact on Financial (Credit, Market, Treasury & Capital) and Operational Risks arising from climate change through physical risks and risks associated with transitioning to a lower carbon economy. The effects of climate change may be highly significant in their breadth and magnitude and could affect a large number of firms operating in different sectors and geographies, leading to potential downstream effects to the financial system. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 263 Material existing and emerging risks (continued) There is potential direct impact on banks and other financial institutions through their operations, as well as indirectly through customers and clients. Given this context and to support the Group’s ambition to be a net zero bank by 2050, Climate Risk is a Principal Risk under Barclays’ ERMF. Scientific research suggests that physical risks arising due to climate change such as acute events (e.g. cyclone, hurricanes and floods) and chronic events (longer term shifts in climate patterns) may occur in increasing frequency and severity, Potential tipping points can cause unprecedented damage to particular geographies. Some regions are expected to be more severely affected than others if they are more exposed and/or more vulnerable to certain events. The potential impact of physical risk events on the economy may include lower GDP growth, higher unemployment, shortage of raw materials and products due to supply chain disruptions and significant changes in asset prices. These factors could subsequently impact business model and profitability of Barclays and its clients. Damage to the properties and operations of the Group's clients could decrease their production capacity, increase operating costs, affect insurability and decrease value of those properties. This in turn would lead to a decline in the creditworthiness of clients, which may result in higher defaults, delinquencies, write-offs and impairment charges in the Group's portfolios. Physical hazards may also impact the creditworthiness of the sovereigns of countries in which they occur. The deterioration in the credit ratings of sovereign bonds could affect their access to capital and their eligibility for inclusion in banks' liquidity buffers. These hazards may also impact the value of investments which the Group holds. A transition to a low-carbon economy requires policy and regulatory changes, new national or regional commitments, new technological innovations and changes to supply and demand systems within industries. The transition to a low- carbon economy may also trigger changes in consumer behaviour and market sentiment. These changes may result in increased costs and reduced demand for the products and services of a company including early retirement and impairment of assets, or decreased revenue and profitability. The Group's clients that are more susceptible and exposed to these changes may face financial difficulties which in turn may impact their creditworthiness. In addition, impacts to the creditworthiness of the Group's clients, customers and counterparties (particularly in high carbon sectors), can also arise a result of climate- related legal actions or investigations, where outcomes of such actions have material financial impacts. This in turn can increase credit risk within group portfolios (for further details on credit risk, refer to ii) Credit Risk on page 263). Both transition and physical risk drivers may lead to increased price volatility and repricing of market instruments, which in turn may impact the value of market instruments held by the Group. The Group's own premises may also suffer physical damage due to weather events leading to increased costs for the Group. As the economy transitions to a lower carbon economy, financial institutions also face significant and rapid developments in stakeholder expectations, policy, law and regulation, which could impact lending activities and the risks associated with lending portfolios as well as asset values. Failure to adequately embed climate risk management into the risk framework may have a material and adverse impact on the Barclays' brand, competitiveness, profitability, capital requirements, cost of funding, financial condition and ability to expand its business. In March 2020, the Group announced its ambition to become a net zero bank by 2050 and its commitment to align all of its financing activities with the goals and timelines of the Paris Agreement. In order to reach these ambitions and targets, and any other climate-related ambitions or targets the Group may commit to in future, the Group will continue to incorporate climate considerations into its strategy, business model, the products and services it provides to customers and its financial and non-financial risk management processes. These include processes to measure and manage the various financial and non-financial risks the Group faces as a result of climate change. The Group also needs to ensure that its strategy and business model adapt to changing national and international standards, industry and scientific practices, regulatory requirements and market expectations regarding climate change, which remain under continuous development. There remains a possibility that these standards, practices, requirements and expectations could change in a manner that substantially increases the cost or effort for the Group to achieve such ambitions and targets. In addition, the Group’s ambitions and targets may prove more challenging to achieve due to changing circumstances and external factors which are beyond the Group’s control, including geopolitical issues, energy security, energy poverty and other considerations such as a just transition to a low-carbon economy. This may be exacerbated if the Group chooses or is required to accelerate its climate-related ambitions or targets as a result of (among other things) international regulatory developments or stakeholder expectations in the UK, the US, the EU or other markets. Achieving Barclays’ climate-related ambitions and targets will also depend on a number of factors outside the Group’s control, including reliable forecasts of hazards from the physical climate models and availability of data/models to measure/assess climate impact on clients. The pathway to net zero is uncertain, complex and dependent on progress in various areas such as advances in low- carbon technologies, collective action by clients to meet their own net zero goals, and supportive public policies in markets where Barclays operates. If there is a lack of progress in the aforementioned areas, Barclays may fail to achieve its climate- related ambitions and targets, and this could have a material adverse effect on Barclays’ business, operations, financial condition, prospects and reputation. + For further details on the potential legal risk from failing to achieve our climate-related ambitions and targets, refer to page 270. ii) Credit risk Credit risk is the risk of loss to the Group from the failure of clients, customers or counterparties, including sovereigns, to fully honour their obligations to members of the Group, including the whole and timely payment of principal, interest, collateral, and other receivables. Credit risk is impacted by a number of factors outside the Group’s control, including wider economic conditions. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 264 Material existing and emerging risks (continued) a) Impairment Impairment is calculated in line with the requirements of IFRS9. Loss allowances, based on ECLs, are measured on a forward-looking basis using a broad range of financial metrics and application of complex judgements. Accordingly, impairment charges are potentially volatile and may not successfully predict actual credit losses, particularly under stressed conditions. Failure by the Group to accurately estimate credit losses through ECLs could have a material adverse effect on the Group's business, results of operations, financial condition, and prospects. + For further details, refer to Note 8. b) Specific portfolios, sectors and concentrations The Group is subject to risks arising from changes in credit quality and recovery rates for loans and advances due from borrowers and counterparties. Additionally, the Group is subject to a concentration of those risks where it has significant exposures to borrowers and counterparties in specific sectors, or to particular types of borrowers and counterparties. Any deterioration in the credit quality of such borrowers and counterparties could lead to lower recoverability from loans and advances, and higher impairment charges. Accordingly, any of the following areas of uncertainty could have a material adverse impact on the Group's business, results of operations, financial condition, and prospects: • Consumer affordability: this remains a key area of focus, particularly in unsecured lending, as cost of living pressures persist. Macroeconomic factors, such as unemployment, high interest rates or broader inflationary pressures, which impact a customer’s ability to service debt payments, could lead to increased arrears in both unsecured and secured products. • UK Retail, Hospitality and Leisure: despite holding up reasonably well during most of 2023, continuing cost of living pressures, falling consumer confidence, or other macroeconomic factors adversely affecting consumers could trigger a contraction in demand which, together with rising business costs and, for UK retail, a structural shift to online shopping, would add pressure to sectors heavily reliant on consumer discretionary spending during 2024. This represents a potential risk in the Group’s UK corporate portfolio as a higher probability of default exists for retailers, hospitality providers and their landlords while these pressures remain. • Real Estate: UK property represents a significant portion of the Group's overall retail and corporate credit exposure, and the Group remains at risk of increased impairment from a material fall in property prices. During 2023 rising mortgage interest rates and increasing economic concerns have reduced both housing market activity and customer borrowing capacity, resulting in modest house price declines year on year. These challenging market conditions are likely to continue in 2024 as the effect of higher interest rates continues to feed through to disposable incomes, especially in London and the South East of the UK where the Group has a high exposure. Additionally, as mortgages roll off existing rates onto new higher rates, there is a risk of increased borrower defaults. This could put further downward pressure on property prices and, in turn, impact the Group’s impairment and capital position. Furthermore, certain segments of the housing market could be subject to specific valuation impacts (for example, certain properties within the Group's residential loan portfolio may be subject to remediation activities relating to fire safety standards). The Group’s corporate exposure is conservatively positioned with low LTVs but remains vulnerable to a deteriorating economic environment, and moderate stress has been experienced in the Group's (predominantly) US office commercial real estate exposure during 2023. As structural shifts in working patterns, such as the normalisation of ‘hybrid’ working, mature, the Group remains exposed to further stress. Landlords serving business tenants whose income is based on discretionary consumer spending are also at risk from reduced rent collection. • Leveraged Finance Underwriting:the Group takes on non-investment grade underwriting exposures, including single name risk, particularly in the US and the UK. The subdued investor appetite in the underwriting market during 2023 exposed the Group to extended underwriting periods and negative movements in marks, which could deteriorate further and result in losses for the Group (and higher capital charges) if market conditions remain challenging during 2024 and exposures remain on book for further extended periods. • Oil & Gas sector: high market energy prices during 2023 have helped restore balance sheet strength to companies operating in this sector. However, in the longer term, costs associated with the transition towards renewable sources of energy may place greater financial demands on oil and gas companies. • Air Travel: the sector returned to profit in 2023 as lower margin (tourist) demand for air travel recovered to pre-pandemic levels. That said, there remains a heightened risk to the revenue streams of the Group’s clients and, consequentially, their ability to service debt obligation. These risks stem from the structural decline in higher margin business travel, consolidation within the European airline market, reputational damage and/or costs associated with the emerging ‘fake parts’ scandal, volatile oil prices, increasingly extreme weather patterns and concerns about the impact of air travel on climate change. • Information Technology sector: while dominated by well-known US firms, many companies struggle to monetise their product offerings and face increasing reputational risk particularly as regulatory scrutiny increases. Given the nature of their activities, the Group’s clients in this sector face heightened risk from data security breaches and ransomware and/or cyber attacks as well as from the malicious use of Artificial Intelligence, all of which could negatively impact their ability to service debt obligations. The Group also has large individual exposures to single name counterparties (such as brokers, central clearing houses, dealers, banks, mutual and hedge funds, and other institutional clients) in both its lending and trading activities, including derivative trades. The default of one such counterparty could cause contagion across clients involved in similar activities and/or adversely impact asset values should margin calls necessitate rapid asset disposals by that counterparty to raise liquidity. In addition, where such counterparty risk has been mitigated by taking collateral, credit risk may remain high if the collateral held cannot be monetised or has to be liquidated at prices which are insufficient to recover the full amount of the loan or derivative exposure. Any such defaults could have a material adverse effect on the Group’s results due to, for example, increased credit losses and higher impairment charges. Impact to the creditworthiness of the Group's clients, customers and Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 265 Material existing and emerging risks (continued) counterparties (particularly in high carbon sectors), can also arise out of climate- related legal actions or investigations commenced against the Group's clients, customers and counterparties (particularly in high carbon sectors), where outcomes of such actions have material financial impacts, which can in turn increase credit risk within Group portfolios. + For further details on the Group’s approach to credit risk, refer to the credit risk management and credit risk performance sections. iii) Market risk Market risk is the risk of loss arising from potential adverse changes in the value of the Group’s assets and liabilities from fluctuation in market variables including, but not limited to, interest rates, foreign exchange rates, equity prices, commodity prices, credit spreads, implied volatilities and asset correlations. Economic and financial market uncertainties remain elevated, driven by elevated inflation and tightening monetary policy, both of which are exacerbated by geopolitical conflicts and idiosyncratic market events. A disruptive adjustment to higher or lower interest rate levels and deteriorating trade and geopolitical tensions could heighten market risks for the Group’s portfolios. In addition, the Group’s trading business could be vulnerable were there to be prolonged period of elevated asset price volatility, particularly if it adversely affects market liquidity. Such a scenario could impact the Group’s ability to execute client trades and may also result in lower client flow-driven income and/or market-based losses on its existing portfolio of assets. These can include higher hedging costs from rebalancing risks that need to be managed dynamically as market levels and their associated volatilities change. Changes in market conditions could have a material adverse effect on the Group’s business, results of operations, financial condition and prospects. + For further details on the Group’s approach to market risk, refer to the market risk management and market risk performance sections. iv) Treasury and capital risk There are three primary types of treasury and capital risk faced by the Group: a) Liquidity risk Liquidity risk is the risk that the Group is unable to meet its contractual or contingent obligations or that it does not have the appropriate amount, tenor and composition of funding and liquidity to support its assets. This could cause the Group to fail to meet regulatory and/or internal liquidity requirements, make repayments of principal or interest as they fall due or to support day-to-day business activities. Key liquidity risks that the Group faces include: • Stability of the Group’s deposit funding profile: deposits which are payable on demand or at short notice could be adversely affected by the Group failing to preserve the current level of customer and investor confidence or as a result of competition in the banking industry. • Ongoing access to wholesale funding: the Group regularly accesses the money and capital markets to provide short- term and long-term unsecured and secured funding to support its operations. A loss of counterparty confidence, or adverse market conditions (such as the recent rises in interest rates) could lead to a reduction in the tenor, or an increase in the costs, of the Group’s unsecured and secured wholesale funding or affect the Group’s access to such funding. • Impacts of market volatility: adverse market conditions, with increased volatility in asset prices could: (i) negatively impact the Group’s liquidity position through increased derivative margin requirements and/or wider haircuts when monetising liquidity pool securities; and (ii) make it more difficult for the Group to execute secured financing transactions. • Intraday liquidity usage: increased collateral requirements for payments and securities settlement systems could negatively impact the Group’s liquidity position, as cash and liquid assets required for intraday purposes are unavailable to meet other outflows. • Off-balance sheet commitments: deterioration in economic and market conditions could cause customers to draw on off-balance sheet commitments provided to them, for example revolving credit facilities, negatively affecting the Group’s liquidity position. • Credit rating changes and impact on funding costs: any reductions in a credit rating (in particular, any downgrade below investment grade) may affect the Group’s access to money or capital markets and/or the terms on which the Group is able to obtain market funding (for example, this could lead to increased costs of funding and wider credit spreads, the triggering of additional collateral or other requirements in derivative contracts and other secured funding arrangements, or limits on the range of counterparties who are willing to enter into transactions with the Group). b) Capital risk Capital risk is the risk that the Group has an insufficient level or composition of capital to support its normal business activities and to meet its regulatory capital requirements under normal operating environments and stressed conditions (both actual and as defined for internal planning or regulatory stress testing purposes). This also includes the risk from the Group’s pension plans. Key capital risks that the Group faces include: • Failure to meet prudential capital requirements: this could lead to the Group being unable to support some or all of its business activities, a failure to pass regulatory stress tests, increased cost of funding due to deterioration in investor appetite or credit ratings and restrictions on distributions (including in respect of its shares and/or additional tier 1 instruments), leading to an inability to comply with the Group's distribution policy and/or the need to take additional measures to strengthen the Group’s capital or leverage position. • Adverse changes in FX rates impacting capital ratios: the Group has capital resources, risk weighted assets and leverage exposures denominated in foreign currencies. Changes in foreign currency exchange rates may adversely impact the sterling equivalent value of these items. As a result, the Group’s regulatory capital ratios are sensitive to foreign currency movements. Failure to appropriately manage the Group’s balance sheet to take account of foreign currency movements could result in an adverse impact on the Group’s regulatory capital and leverage ratios. • Adverse movements in the pension fund: adverse movements in pension assets and liabilities for defined benefit pension schemes could result in deficits on a technical provision and/or IAS 19 accounting basis. This could lead to the Group making substantial additional contributions to its pension plans and/or a deterioration in its capital position. The market value of pension fund assets might decline or investment returns might reduce. Under IAS 19, the liabilities discount rate is derived from the yields of high-quality corporate bonds. Therefore, the valuation of the Group’s defined benefits schemes would be adversely affected by a prolonged fall in the discount rate due to a persistent low interest rate and/or Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 266 Material existing and emerging risks (continued) credit spread environment. Inflation is another significant risk driver to the pension fund as the liabilities are adversely impacted by an increase in long-term inflation expectations. c) Interest rate risk in the banking book Interest rate risk in the banking book is the risk that the Group is exposed to capital or income volatility because of a mismatch between the interest rate exposures of its (non-traded) assets and liabilities. The Group’s hedging programmes for interest rate risk in the banking book rely on behavioural assumptions and, as a result, the effectiveness of the hedging strategy cannot be guaranteed. A potential mismatch in the balance or duration of the hedging assumptions could lead to earnings deterioration if there are interest rate movements which are not adequately hedged. A decline in interest rates may also compress net interest margin on retail and corporate portfolios. In addition, the Group’s liquid asset portfolio is exposed to potential capital and/or income volatility due to movements in market rates and prices which may have a material adverse effect on the capital position of the Group. + For further details on the Group’s approach to treasury and capital risk, refer to the treasury and capital risk management and treasury and capital risk performance sections. v) Operational risk Operational risk is the risk of loss to the Group from inadequate or failed processes or systems, human factors or due to external events where the root cause is not due to credit or market risks. Examples include: a) Operational resilience The Group functions in a highly competitive market, with customers and clients that expect consistent and smooth business processes. The loss of or disruption to business processing is a material inherent risk within the Group and across the financial services industry, whether arising through failures in the Group’s technology systems, cyber and/or data integrity disruptions, unavailability of a Group site, closure of real estate services provided through its retail branch network, or unavailability of personnel or services supplied by third parties, and there are particular challenges with recovering from a major cyberattack. Failure to build resilience and recovery capabilities into business processes, or into the services on which the Group’s business processes depend, may result in significant customer detriment, costs to reimburse losses incurred by the Group’s customers and clients, and reputational damage. b) Cyberattacks Cyberattacks continue to be a global threat inherent across all industries, with the number and severity of attacks continuing to rise. The financial sector remains a primary target for cybercriminals, hostile nation states, opportunists and hacktivists. The Group, like other financial institutions, experiences numerous attempts to compromise its cybersecurity protections. In 2023, cybersecurity incidents experienced by Barclays included distributed denial of service (DDoS), phishing, credential stuffing, and exploitation of software vulnerabilities. The Group cannot provide absolute security against cyberattacks. Malicious actors, who are increasingly sophisticated in their methods, tactics, techniques and procedures, seek to steal money, gain unauthorised access to, destroy or manipulate data, and disrupt operations. Further, some of their attacks may not be recognised or discovered until launched or after initial entry into the environment, such as novel or zero-day attacks that are launched before patches are available and defences can be readied. Other attacks may take advantage of the window during which patching or the deployment of other defences is underway, but not yet complete. Malicious actors are also increasingly developing methods to avoid prevention, detection and alerting capabilities, including employing counter- forensic tactics making response activities more difficult. Cyberattacks can originate from a wide variety of sources and target the Group in numerous ways, including attacks on networks, systems, applications or devices used by the Group or parties such as service providers and other suppliers, counterparties, employees, contractors, customers or clients, presenting the Group with a vast and complex defence perimeter. Moreover, the Group does not have direct control over the cybersecurity of the systems of its clients, customers, counterparties and third-party service providers and suppliers, limiting the Group’s ability to effectively protect and defend against certain threats Some of the Group’s third-party service providers and suppliers have experienced successful attempts to compromise their cybersecurity. These have included ransomware attacks that have disrupted the service providers’ or suppliers’ operations and, in some cases, have had impacts on the Group's operations. Such cyberattacks are likely to continue. A failure in the Group’s adherence to its cybersecurity policies, procedures or controls, employee malfeasance, and human, governance or technological error could also compromise the Group’s ability to successfully prevent and defend against cyberattacks. Furthermore, certain legacy technologies that are at or approaching end-of-life may not be able to maintain acceptable levels of security. The Group has experienced cybersecurity incidents and near-misses in the past, and it is inevitable that additional incidents will occur in the future. Cybersecurity risks are expected to increase, due to factors such as the increasing demand across the industry and customer expectations for continued expansion of services delivered over the Internet; increasing reliance on Internet-based products, applications and data storage; the onset of AI, which may be used to facilitate increasingly sophisticated attacks; and changes in ways of working by the Group’s employees, contractors, and third party service providers and suppliers and their subcontractors as a long-term consequence of the COVID-19 pandemic. Bad actors have taken advantage of remote working practices and modified customer behaviours, exploiting the situation in novel ways that may elude defences. Additionally, geopolitical turmoil may serve to increase the risk of a cyberattack that could impact Barclays directly, or indirectly through its critical suppliers or national infrastructure. In recent years, the Group has faced a heightened risk of cyberattack as a result of the conflicts in Eastern Europe and the Middle East. Common types of cyberattacks include deployment of malware to obtain covert access to systems and data; ransomware attacks that render systems and data unavailable through encryption and attempts to leverage business interruption or stolen data for extortion; novel or zero- day exploits; denial of service and distributed denial of service attacks; infiltration via business email compromise; social engineering, including phishing, vishing and smishing; automated attacks using botnets; third-party customer, vendor, service provider and supplier account takeover; malicious activity facilitated by an insider; and credential validation or stuffing attacks using login and password pairs from unrelated breaches. A successful cyberattack of any type has the potential to cause serious harm to the Group or its clients and customers, including exposure to potential contractual liability, claims, litigation, regulatory or other government action, loss of existing or potential customers, damage to the Group’s brand and reputation, and other financial loss. The Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 267 Material existing and emerging risks (continued) impact of a successful cyberattack is also likely to include operational consequences (such as unavailability of services, networks, systems, devices or data), remediation of which could come at significant cost. Regulators worldwide continue to recognise cybersecurity as a systemic risk to the financial sector and have highlighted the need for financial institutions to improve their monitoring and control of, and resilience to, cyberattacks. A successful cyberattack may, therefore, result in significant regulatory fines on the Group. In addition, any new regulatory measures introduced to mitigate these risks are likely to result in increased technology and compliance costs for the Group. + For further details on the Group’s approach to cyberattacks, see the operational risk performance section. For further details on cybersecurity regulation applicable to the Group, refer to the Supervision and regulation section. c) New and emergent technology Technology is fundamental to the Group’s business and the financial services industry. Technological advancements present opportunities to develop new and innovative ways of doing business across the Group, with new solutions being developed both in-house and in association with third party companies. For example, payment services and securities, futures and options trading are increasingly occurring electronically, both on the Group’s own systems and through other alternative systems, and becoming automated. Whilst increased use of electronic payment and trading systems and direct electronic access to trading markets could significantly reduce the Group’s cost base, it may, conversely, reduce the commissions, fees and margins made by the Group on these transactions which could have a material adverse effect on the Group’s business, results of operations, financial condition and prospects. The rapid development in AI is another area the Group is monitoring closely. This includes the identification of potential use cases for responsible adoption of AI in the Group's own operations as well as managing the threats third party usage of AI may pose, including with respect to cybersecurity and fraud. Introducing new forms of technology, however, has the potential to increase inherent risk. Failure to evaluate, actively manage and closely monitor risk during all phases of business development and implementation could introduce new vulnerabilities and security flaws and have a material adverse effect on the Group’s business, results of operations, financial condition and prospects. d) External fraud The nature of fraud is wide-ranging and continues to evolve, as criminals seek opportunities to target the Group’s business activities and exploit changes in customer behaviour and product and channel use (such as the increased use of digital products and enhanced online services) or exploit new products. Fraud attacks can be very sophisticated and are often orchestrated by organised crime groups who use various techniques to target customers and clients directly to obtain confidential or personal information that can be used to commit fraud. The UK market has also seen significant growth in ‘scams’ where the Group takes increased levels of liability as part of a voluntary code to provide additional safeguards to customers and clients who are tricked into making payments to fraudsters. The impact from fraud can lead to customer detriment, financial losses (including the reimbursement of losses incurred by customers), loss of business, missed business opportunities and reputational damage, all of which could have a material adverse impact on the Group’s business, results of operations, financial condition and prospects. e) Data management and information protection The Group holds and processes large volumes of data, including personal information, financial data and other confidential information, and the Group’s businesses are subject to complex and evolving laws and regulations governing the privacy and protection of data, including Regulation (EU) 2016/679 (the General Data Protection Regulation as it applies in the EU and the UK). This data could relate to: (i) the Group’s clients, customers, prospective clients and customers and their employees; (ii) clients and customers of the Group’s clients and customers and their employees;(iii) the Group’s suppliers, counterparties and other external parties, and their employees; and (iv) the Group’s employees and prospective employees. The international nature of both the Group’s business and its IT infrastructure also means that data and personal information may be available in countries other than those from where the information originated. Accordingly, the Group must ensure that its collection, use, transfer and storage of data, including personal information, complies with all applicable laws and regulations in all relevant jurisdictions, which could: (i) increase the Group’s compliance and operating costs; (ii) impact the development of new products or services or the offering of existing products or services; (iii) affect how products and services are offered to clients and customers; (iv) demand significant oversight by the Group’s management; and (v) require the Group to review some elements of the structure of its businesses, operations and systems in less efficient ways. Concerns regarding the effectiveness of the Group’s measures to safeguard data, including personal information, or even the perception that those measures are inadequate, could expose the Group to the risk of loss or unavailability of data or data integrity issues and/or cause the Group to lose existing or potential clients and customers, and thereby reduce the Group’s revenues. Furthermore, any failure or perceived failure by the Group to comply with applicable privacy or data protection laws and regulations may subject it to potential contractual liability, claims, litigation, regulatory or other government action (including significant regulatory fines) and require changes to certain operations or practices which could also inhibit the Group’s development or marketing of certain products or services, or increase the costs of offering them to customers. Any of these events could damage the Group’s reputation, subject the Group to material fines or other monetary penalties, make the Group liable for the payment of compensatory damages, divert management's time and attention, lead to enhanced regulatory oversight and otherwise materially adversely affect its business, results of operations, financial condition and prospects. + For further details on data protection regulation applicable to the Group, refer to the supervision and regulation section. f) Algorithmic trading In some areas of the investment banking business, trading algorithms are used to price and risk manage client and principal transactions. An algorithmic error could result in erroneous or duplicated transactions, a system outage, or impact the Group’s pricing abilities, which could have a material adverse effect on the Group’s business, results of operations, financial condition, prospects and reputation. g) Processing errors The Group’s businesses are highly dependent on its ability to process and monitor, on a daily basis, a very large number of transactions, many of which are Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 268 Material existing and emerging risks (continued) highly complex and occur at high volumes and frequencies, across numerous and diverse markets in many currencies. As the Group’s customer base and geographical reach expand and the volume, speed, frequency and complexity of transactions, especially electronic transactions (as well as the requirements to report such transactions on a real-time basis to clients, regulators and exchanges) increase, developing, maintaining and upgrading operational systems and infrastructure becomes more challenging. The risk of systems or human error in connection with such transactions increases with these developments, as well as the potential consequences of such errors due to the speed and volume of transactions involved and the potential difficulty associated with discovering errors quickly enough to limit the resulting consequences. Furthermore, events that are wholly or partially beyond the Group’s control, such as a spike in transaction volume, could adversely affect the Group’s ability to process transactions or provide banking and payment services. Processing errors could result in the Group, among other things: (i) failing to provide information, services and liquidity to clients and counterparties in a timely manner; (ii) failing to settle and/or confirm transactions; (iii) causing funds transfers, capital markets trades and/or other transactions to be executed erroneously, illegally or with unintended consequences; and (iv) adversely affecting financial, trading or currency markets. Any of these events could materially disadvantage the Group’s customers, clients and counterparties (including them suffering financial loss) and/or result in a loss of confidence in the Group which, in turn, could have a material adverse effect on the Group’s business, results of operations, financial condition and prospects. Any of these events could also lead to breaches of laws, rules or regulations and, hence, regulatory enforcement actions, which could result in significant financial loss, imposition of additional capital requirements, enhanced regulatory supervision and reputational damage. h) Supplier exposure The Group depends on suppliers for the provision of many of its services and the development of technology. Whilst the Group depends on suppliers, it remains fully accountable to its customers and clients for risks arising from the actions of suppliers and may not be able to recover from its suppliers any amounts paid to customers and clients for losses suffered by them. The dependency on suppliers and sub-contracting of outsourced services introduces concentration risk where the failure of specific suppliers could have an impact on the Group’s ability to continue to provide material services to its customers. Failure to adequately manage supplier risk could have a material adverse effect on the Group’s business, results of operations, financial condition and prospects. i) Estimates and judgements relating to critical accounting policies and regulatory disclosures The preparation of financial statements requires the application of accounting policies and judgements to be made in accordance with IFRS. Regulatory returns and capital disclosures are prepared in accordance with the relevant capital reporting requirements and also require assumptions and estimates to be made. The key areas involving a higher degree of judgement or complexity, or areas where assumptions are significant to the consolidated and individual financial statements and regulatory returns and disclosures, include credit impairment provisions, taxes, fair value of financial instruments, goodwill and intangible assets, pensions and post-retirement benefits, the calculation of RWAs and capital, and provisions including conduct and legal, competition and regulatory matters (please refer to the notes to the audited financial statements for further details). There is a risk that if the judgement exercised, or the estimates or assumptions used, subsequently turn out to be incorrect or are altered as a result of subsequent feedback from the Group's regulators, this could result in material losses to the Group, beyond what was anticipated or provided for, including as a result of changes to treatments in regulatory returns and capital disclosures. If capital requirements are not met as the result of changes in interpretation, compliance with the Group's distribution policy could be impacted and/or additional measures may be required to strengthen the Group's capital or leverage position, which may also lead to the Group's inability to achieve stated targets. Further development of accounting standards and regulatory interpretations could also materially impact the Group’s results of operations, financial condition and prospects. j) Tax risk The Group is required to comply with the domestic and international tax laws and practice of all countries in which it has business operations. There is a risk that the Group could suffer losses due to additional tax charges, other financial costs or reputational damage as a result of failing to comply with such laws and practice (including where the Group’s interpretation of such laws differs from the interpretation of tax authorities), or by failing to manage its tax affairs in an appropriate manner, with much of this risk attributable to the international structure of the Group. In addition, the introduction of new international tax regimes, increasing tax authority focus on reporting and disclosure requirements around the world as well as the digitisation of the administration of tax have the potential to increase the Group’s tax compliance obligations further. In 2023, the UK Government enacted legislation on the OECD Inclusive Framework on Base Erosion and Profit Shifting Pillar Two Framework introducing a global minimum tax rate of 15%. The UK’s Pillar Two rules apply for accounting periods beginning on or after 31 December 2023 which will increase the Group's tax compliance obligations. In the USA, the corporate alternative minimum tax on adjusted financial statements income introduced by the Inflation Reduction Act became effective on 1 January 2023. These new tax regimes require systems and process changes that introduce potential additional operational risks. k) Ability to hire and retain appropriately qualified employees As a regulated financial institution, the Group requires diversified and specialist skilled colleagues. The Group’s ability to attract, develop and retain a diverse mix of talent is key to the delivery of its core business activity and strategy. This is impacted by a range of external and internal factors, such as macroeconomic factors, labour and immigration policy in the jurisdictions in which the Group operates, industry-wide headcount reductions in particular sectors, regulatory limits on compensation for senior executives and the potential effects on employee engagement and wellbeing from long-term periods of working remotely. Failure to attract or prevent the departure of appropriately qualified and skilled employees could have a material adverse effect on the Group’s business, results of operations, financial condition and prospects. Additionally, this may result in Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 269 Material existing and emerging risks (continued) disruption to service which could in turn lead to customer detriment and reputational damage. + For further details on the Group’s approach to operational risk, refer to the operational risk management and operational risk performance sections. vi) Model risk Model risk is the potential for adverse consequences from decisions based on incorrect or misused model outputs and reports. The Group relies on models to support a broad range of business and risk management activities, including informing business decisions and strategies, measuring and limiting risk, valuing exposures (including the calculation of impairment), conducting stress testing, calculating RWAs and assessing capital adequacy, supporting new business acceptance, risk and reward evaluation, managing client assets, and meeting reporting requirements. Models are, by their nature, imperfect representations of reality and have some degree of uncertainty because they rely on assumptions and inputs, and so are subject to intrinsic uncertainty, errors and inappropriate use affecting the accuracy of their outputs. This may be exacerbated when dealing with unprecedented scenarios, as was the case during the COVID-19 pandemic, due to the lack of reliable historical reference points and data. For instance, the quality of the data used in models across the Group has a material impact on the accuracy and completeness of its risk and financial metrics. Model uncertainty, errors and inappropriate use may result in (among other things) the Group making inappropriate business decisions and/or inaccuracies or errors in the Group’s risk management and regulatory reporting processes. This could result in significant financial loss, imposition of additional capital requirements, enhanced regulatory supervision and reputational damage, all of which could have a material adverse effect on the Group’s business, results of operations, financial condition and prospects. + For further details on the Group’s approach to model risk, refer to the model risk management and model risk performance sections. vii) Compliance risk Compliance risk is the risk of poor outcomes for, or harm to, customers, clients and markets, arising from the delivery of the Group's products and services (conduct risk) and the risk to Barclays, its clients, customers or markets from a failure to comply with the laws, rules and regulations (LRR) applicable to the firm. This risk could manifest itself in a variety of ways, including: a) Market conduct The Group’s businesses are exposed to risk from potential non-compliance with its policies and standards (which incorporates regulatory requirements set by law and our regulators) and instances of wilful and negligent misconduct by employees, all of which could result in potential customer and client detriment, enforcement action (including regulatory fines and/or sanctions), increased operation and compliance costs, redress or remediation or reputational damage which in turn could have a material adverse effect on the Group’s business, financial condition and prospects. Examples of employee misconduct which could have a material adverse effect on the Group’s business include: (i) improperly selling or marketing the Group’s products and services; (ii) engaging in insider trading, market manipulation or unauthorised trading; or (iii) misappropriating confidential or proprietary information belonging to the Group, its customers or third parties. These risks may be exacerbated in circumstances where the Group is unable to rely on physical oversight and supervision of employees, noting the move to a hybrid working model for many colleagues. b) Customer protection The Group must ensure that its customers, particularly those that are vulnerable, are able to make well-informed decisions on how best to use the Group’s financial services and understand the protection available to them if something goes wrong. Poor customer outcomes can result from the failure to: (i) communicate fairly and clearly with customers; (ii) provide services in a timely and fair manner; (iii) handle and protect customer data appropriately; and (iv) undertake appropriate activity to address customer detriment, including the adherence to regulatory and legal requirements on complaint handling. The Group is at risk of financial loss and reputational damage as a result also a risk of regulatory censure or enforcement action. In July 2023, the FCA’s new Consumer Duty came into force for new and existing products or services that are open to sale or renewal. It will apply to closed products and services from 31 July 2024. The duty sets higher expectations for the standard of care that firms provide to retail customers and impacts all aspects of Barclays’ retail businesses, including every retail customer journey, product and service as well as our relationships with partners, suppliers and third parties. This has resulted in significant implementation costs and there will also be higher ongoing costs for the industry as a result of extensive monitoring and evidential requirements. c) Product design and review risk Products and services must meet the needs of clients, customers, markets and the Group throughout their life cycle, However, there is a risk that the design and review of the Group’s products and services fail to reasonably consider and address potential or actual negative outcomes for customers, which may result in customer detriment, enforcement action (including regulatory fines and/or sanctions), redress and remediation and reputational damage. Both the design and review of products and services are a key area of focus for regulators and the Group. d) Financial crime The Group may be adversely affected if it fails to effectively mitigate the risk that third parties or its employees facilitate, or that its products and services are used to facilitate, financial crime (money laundering, terrorist financing, breaches of economic and financial sanctions, bribery and corruption, and the facilitation of tax evasion). UK and US regulations covering financial institutions continue to focus on combating financial crime. Failure to comply may lead to enforcement or other action by the Group’s regulators, including severe penalties, which may have a material adverse effect on the Group’s business, financial condition, prospects and reputation. e) Conflicts of interest Identifying and managing conflicts of interest is fundamental to the conduct of the Group's business, relationships with customers and clients, and the markets in which the Group operates. Understanding the Conflicts of Interest that impact or potentially impact the Group enables them to be identified, managed and mitigated appropriately. Even if there is no evidence of improper actions, a conflict of interest can create an appearance of impropriety that undermines confidence in the Group and its employees. If the Group does not identify and manage conflicts of interest (business or personal) appropriately, it could have an adverse effect on the Group’s business, customers and the markets within which it operates. f) Regulatory focus on culture and accountability Regulators around the world continue to emphasise the importance of culture and personal accountability and enforce the adoption of adequate internal reporting and whistleblowing procedures to help to Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 270 Material existing and emerging risks (continued) promote appropriate conduct and drive positive outcomes for customers, colleagues, clients and markets. The requirements and expectations of the UK Senior Managers Regime, Certification Regime and Conduct Rules reinforce additional accountabilities for individuals across the Group, with an increased focus on governance and rigour, with similar requirements also introduced in other jurisdictions globally. Failure to meet these requirements and expectations may lead to regulatory sanctions, both for the individuals and the Group. g) Laws, rules and regulations Barclays is subject to range of laws, rules and regulations across the world. A failure to comply with these may have an adverse effect on the Barclays Bank Group’s business, customers and the markets within which it operates and could result in reputational damage, penalties, damages or fines. + For further details on the Group’s approach to compliance risk, refer to the compliance risk management and compliance risk performance sections. viii) Reputation risk Reputation risk is the risk that an action, transaction, investment, event, decision or business relationship will reduce trust in the Group’s integrity and/or competence. Any material lapse in standards of integrity, compliance, customer service or operating efficiency may represent a potential reputation risk. Stakeholder expectations constantly evolve, and so reputation risk is dynamic and varies between geographical regions, groups and individuals. A risk arising in one business area can have an adverse effect upon the Group’s overall reputation and any one transaction, investment or event (in the perception of key stakeholders) can reduce trust in the Group’s integrity and competence. The Group’s association with sensitive topics and sectors has been, and in some instances continues to be, an area of concern for stakeholders, including: (i) the financing of, and investments in, businesses which operate in sectors that are sensitive because of their relative carbon intensity or local environmental impact; (ii) potential association with human rights violations (including combating modern slavery) in the Group’s operations or supply chain and by clients and customers; and (iii) the financing of businesses which manufacture and export military and riot control goods and services. Reputation risk could also arise from negative public opinion about the actual, or perceived, manner in which the Group (including its employees, clients and other associations) conducts its business activities, or the Group’s financial performance, as well as actual or perceived practices in banking and the financial services industry generally. Modern technologies, in particular, online social media channels and other broadcast tools that facilitate communication with large audiences in short time frames and with minimal costs, may significantly enhance and accelerate the distribution and effect of damaging information and allegations. Negative public opinion may adversely affect the Group’s ability to retain and attract customers, in particular, corporate and retail depositors, and to retain and motivate staff, and could have a material adverse effect on the Group’s business, results of operations, financial condition and prospects. Claims of potential greenwashing arising from sustainability-related statements made by Barclays may also give rise to reputation risk. In addition to the above, reputation risk has the potential to arise from operational issues or conduct matters which cause detriment to customers, clients, market integrity, effective competition or the Group (refer to ‘v) Operational risk’ above). + For further details on the Group’s approach to reputation risk, refer to the reputation risk management and reputation risk performance sections. ix) Legal risk and legal, competition and regulatory matters The Group conducts activities in a highly regulated global market which exposes it and its employees to legal risk arising from: (i) the multitude of laws, rules and regulations that apply to the businesses it operates, which are highly dynamic, may vary between jurisdictions and/or conflict, and may be unclear in their application to particular circumstances especially in new and emerging areas; and (ii) the diversified and evolving nature of the Group’s businesses and business practices. In each case, this exposes the Group and its employees to the risk of loss or the imposition of penalties, damages or fines from the failure of members of the Group to meet applicable laws, rules, regulations or contractual requirements or to assert or defend their intellectual property rights. Legal risk may arise in relation to any number of the material existing and emerging risks identified above. A breach of applicable laws, rules and/or regulations by the Group or its employees could result in criminal prosecution, regulatory censure, potentially significant fines and other sanctions in the jurisdictions in which the Group operates. Where clients, customers or other third parties are harmed by the Group’s conduct, this may also give rise to civil legal proceedings, including class actions. Other legal disputes may also arise between the Group and third parties relating to matters such as breaches or enforcement of legal rights or obligations arising under contracts, statutes or common law. Adverse findings in any such matters may result in the Group being liable to third parties or may result in the Group’s rights not being enforced or not being enforced in the manner intended or desired by the Group. Details of legal, competition and regulatory matters to which the Group is currently exposed are set out in Note 25. In addition to matters specifically described in Note 25, the Group is engaged in various other legal proceedings which arise in the ordinary course of business. The Group is also subject to requests for information, investigations and other reviews (including skilled person reviews) by regulators, governmental and other public bodies. These may be in connection with business activities in which the Group is, or has been, engaged, or areas of particular regulatory focus, such as financial crime, money laundering or terrorist financing. The Group may also (from time to time) be subject to claims and/or legal proceedings and other investigations relating to financial and non- financial disclosures made by members of the Group (including, but not limited to, regulatory capital and liquidity reporting and ESG disclosures). Additionally, due to the increasing number of new climate and sustainability-related laws and regulations, growing demand from investors and customers for sustainable products and services, and regulatory and NGO scrutiny, financial institutions, including the Group, may through their business activities face increasing litigation, conduct, enforcement and contract liability risks related to climate change, environmental degradation and other social, governance and sustainability-related issues, including greenwashing risk. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 271 Material existing and emerging risks (continued) This may include laws and regulatory processes and policies seeking to restrict or prohibit doing certain business with entities identified as "boycotting" or "discriminating" against particular industries or considering ESG factors in their investment processes, including to protect the energy and other high carbon sectors from any risks of divestment or challenges in accessing finance. Furthermore, there is a risk that shareholders, campaign groups, customers and other interest groups could seek to take legal action (including under "soft law" mechanisms) against the Group for financing or contributing to climate change and environmental degradation or because the Group's response to climate change or other ESG factors is perceived to be ineffective, insufficient or inappropriate. The outcome of legal, competition and regulatory matters, both those to which the Group is currently exposed and any others which may arise in the future, is difficult to predict (and any provision made in the Group’s financial statements relating to those matters may not be sufficient to cover actual losses). In connection with such matters, the Group may incur significant expense, regardless of the ultimate outcome, and any such matters could expose the Group to any of the following outcomes: substantial monetary damages, settlements and/or fines; remediation of affected customers and clients; other penalties and injunctive relief; additional litigation; criminal prosecution; the loss of any existing agreed protection from prosecution; regulatory restrictions on the Group’s business operations including the withdrawal of authorisations; increased regulatory compliance requirements or changes to laws or regulations; suspension of operations; public reprimands or censure; loss of significant assets or business; a negative effect on the Group’s reputation; loss of confidence by investors, counterparties, clients and/or customers; risk of credit rating agency downgrades; potential negative impact on the availability and/or cost of funding and liquidity; and/or dismissal or resignation of key individuals. In light of the uncertainties involved in legal, competition and regulatory matters, there can be no assurance that the outcome of a particular matter or matters (including formerly active matters or those arising after the date of this Annual Report) will not have a material adverse effect on the Group’s business, results of operations, financial condition and prospects. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 272 Principal risk management Climate risk management Climate risk is the impact on Financial (Credit, Market, Treasury & Capital) and Operational Risks arising from climate change through physical risks and risks associated with transitioning to a lower carbon economy. • Physical risks: Result from a changing climate and can be event-driven (acute risks), including increased frequency and/or severity of extreme weather events such as cyclones, hurricanes and flooding. Physical risks can also be driven by longer term shifts in climate patterns (chronic risks) arising from sustained higher temperatures that may cause rises in sea levels, rising mean temperatures and more frequent/ severe weather events. • Transition risks: The transition to a lower carbon economy is likely to involve significant and rapid policy, regulatory and legal changes, as evolving technology and markets adapt to a changing climate and associated impacts. Overview The Group has developed a Climate Risk Framework (CRF) for financial and operational risks stemming from climate change. This enables Barclays to foster a systematic and consistent approach for managing climate risk across the firm. The key principle underpinning this framework is that climate risk is recognised as a driver of other existing financial (Credit, Market, Treasury and Capital) and non financial (including Operational and Reputational) risks, and not treated as a standalone risk type. The CRF is supported by policies, standards and other relevant documents which contain control objectives that must be met. The CRF: • Defines climate risk • Establishes principles for the The Climate Risk Policy sets objectives for the management of climate risks and establishes key principles for quantifying and reporting, including escalations required to senior stakeholders up to and including the Board Risk Committee (BRC). The Framework and Policy are applicable for Barclays' business activities, with a focus on lending, advisory, sales and trading, capital markets and investments. Climate risk may also drive non-financial risks such as reputational risk, which continue to be managed under the respective risk frameworks. To support the embedment of the Principal Risk, in 2023 the Group delivered the following with three overarching objectives: 1. Enhance and improve risk appetite and associated controls for climate risk 2. Develop a plan for refining modelling and scenario analysis capabilities 3. Expand BlueTrack™, which now covers nine segments comprising of Energy, Power, Cement, Steel, Automotive Manufacturing, UK Housing, Commercial Real Estate, Agriculture and Aviation Organisation, roles and responsibilities The Group Head of Climate Risk is the Principal Risk owner accountable for the management and oversight of the climate risk profile. The Group Head of Climate Risk reports directly to Group CRO. On behalf of the Board, the BRC reviews and approves the Group's approach to managing climate risk. The Group Risk Committee (GRC) is the most senior executive body responsible for reviewing and challenging risk practices for climate. To support the oversight of Barclays' climate risk profile, a Climate Risk Committee (CRC) has been established as a sub-committee of the GRC. The Group Head of Climate risk is the Chair of the CRC. Any material issues are escalated by the CRC to the GRC, and the GRC subsequently escalates to the BRC as appropriate. A Climate Risk control environment has been established in alignment with the Barclays' Control Framework. A Climate Risk Control Forum (CRCF) was established in 2022 to oversee implementation and operation of the Barclays Control Framework, including reviewing risk events, policy and issues management. Climate risk assurance groups were also established and are responsible for performing climate risk specific reviews to support the embedding of the Climate Risk Framework and Policy. Entity Heads of Climate Risk have been appointed across key Barclays legal entities, namely Barclays Bank UK (BBUK) PLC, Barclays Bank (BB) PLC, Barclays Bank Ireland (BBI) PLC, and the US Intermediate Holding Company (US IHC). Broader sustainability matters and reputation risk associated with climate change are coordinated by the Group Sustainability and ESG Team, led by the Group Head of Sustainability. Enterprise Risk Framework (ERMF) Governance Climate Risk Framework (CRF) Board Risk Committee (BRC) Reputation Risk Management Framework (RRMF) Board Sustainability Committee (BSC) identification, measurement, monitoring and reporting of climate risk Risk Credit, market, treasury & capital and operational risks Sustainability matters and reputation risk associated with climate change • Outlines the process for establishing climate risk appetite • Summarises the impact of climate risk on other principal financial and operational risk types • Outlines roles and responsibilities applicable to the Climate Risk Framework Group Risk Committee (GRC) Ownership Group Chief Risk Officer Group Sustainability Committee (GSC) Head of Public Policy and Corporate Responsibility Group Head of Climate Risk Group Head of Sustainability Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 273 Principal risk management (continued) Risk appetite Barclays' approach to setting climate risk appetite is aligned with its ambition to be a net zero bank by 2050 and reducing financed emissions in line with its disclosed sector targets. In accordance with the risk appetite policy and tolerance standards, Barclays has established a climate risk appetite at the Group level, comprising of qualitative risk appetite statements and quantitative constraints. This is reviewed and revised (where applicable) annually and formally approved by the Board. In 2023, Barclays has enhanced its approach for the quantification of climate risk appetite by implementing additional limits and controls, including around the expected financed emissions target (BlueTrack) pathways. The progress against these targets is monitored on a regular basis whilst acknowledging the challenges and external dependencies to reduce financed emissions. The Group continues to regularly review its risk appetite and enhance risk metrics including expansion of risk limits for priority sectors. Risk identification Physical and transition risk drivers can lead to adverse financial impacts through various transmission channels. Transmission channels are causal chains that explain how climate risk drivers impact firms such as Barclays either directly through their own operations and infrastructure or indirectly through their financing and investment activities as described earlier in the "Climate-related Risks" section on page 67. The diagram below illustrates these dynamics. The potential impact of physical risk events at the macro level may include lower GDP growth, higher unemployment and significant changes in the availability and prices of products or commodities. At the micro level, damage to properties and operations of Barclays's clients could lead to increasing costs and possible decline in revenues, which in turn might impact their ability to repay the loans. Thus through these transmission channels, risks for Barclays may materialise in its traditional risk categories such as credit risk, market risk, treasury and capital risk, operational risk and reputational risk. The impact of climate risk drivers may be significant and widespread, affecting companies, households and the general economy leading to potential financial system contagion. Climate risks Economic transmission channels Transition risks • Policy and legal (e.g. carbon tax, litigation actions) • Reputation (e.g. stakeholder concern, change in consumer preferences) • Technology (e.g. substitute technologies, emissions capture) • Market (e.g. change in market sentiment, uncertainty in market signals) Physical risks • Chronic (e.g. temperature, precipitation, agricultural productivity, sea levels) • Acute (e.g. heatwaves, floods, cyclones and wildfires) Micro Affecting individual businesses and households Businesses Households • Property damage and business disruption from severe weather • Stranded assets and new capital expenditure due to transition • Changing demand and costs • Legal liability (from failure to mitigate or adapt) • Loss of income (from weather disruption and health impacts, labour market frictions) • Property damage (from severe weather) or restrictions (from low- carbon policies) increasing costs and affecting valuations Financial risks Credit risk • Defaults by businesses and households • Collateral depreciation Market risk • Repricing of equities, fixed income, commodities etc. Compliance risk • Increased costs to comply with regulatory requirements Financial system contagion Macro Aggregate impacts on the macroeconomy • Capital depreciation and increased investment • Shifts in prices (from structural changes, supply shocks) • Productivity changes (from severe heat, diversion of investment to mitigation and adaptation, higher risk aversion) • Labour market frictions (from physical and transition risks) • Socioeconomic changes (from changing consumption patterns, migration, conflict) • Other impacts on international trade, government revenues, fiscal space, output, interest rates and exchange rates. Operational risk • Supply chain disruption • Forced facility closure Liquidity risk • Increased demand for liquidity • Refinancing risk Climate and economy feedback effects Economy and financial system feedback effects Adapted from Network for Greening the Financial System (NGFS), September 2022 and in consideration of transmission channels relevant to Barclays. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 274 Principal risk management (continued) Barclays' work on assessing climate-related risks have been focused on the short (0-1 year) and medium term (1-5 years) horizons, in line with our financial planning cycle. The feedback effects of climate risk drivers through macro and micro transmissions channels are observed in Barclays' portfolio through traditional risk categories such as credit risk, market risk, treasury and capital risk, operational risk (including legal risk) and reputational risk. Examples of these feedback effects are set out in the table below. Principal risk Credit risk Example effects of climate risk drivers Increase in credit risk due to reduction in borrowers' ability to repay and service debt if the borrower is affected by physical risk events that severely damages its infrastructure and operations. Borrowers that are subjected to higher carbon taxes, penalties or fines for not adequately addressing their impact on climate (i.e. exposed to higher litigation and reputational damages) or do not successfully transition to a lower carbon economy might see deterioration in their credit ratings. In some instances, this could lead to borrowers going into default and impact banks' ability to recover loan value. Market risk Treasury & capital risk Operational risk Reputation risk Uncertainty about timing, severity and frequency of extreme physical climate events may lead to higher volatility in financial markets. Equity prices of corporates operating in carbon intensive sectors may decrease due to reduced demand for products or services. Reduction in financial asset values can potentially lead to abrupt price adjustments, resulting in market risk losses where climate risk is not priced into the asset value. Severe physical events could trigger a sharp increase in demand for liquidity for financial firms, corporates and households. Reduction in banks' access to stable sources of funding or withdrawal of deposits due to climate risk drivers may negatively impact banks' liquidity positions. Deterioration of clients' risk profile due to climate risk drivers may also lead to higher capital requirements. Acute physical risk events may cause damage to banks' essential infrastructure and disrupt operations leading to higher operational risks. Banks rely on a complex network of supplier and service providers. Climate change can disrupt supply chains by affecting the availability of goods and services leading to delays or interruptions in critical operations. Increasingly stringent climate and sustainability-related laws and regulations and the pace at which the regulations are implemented means that banks, through their business activities, may face increasing litigation and other claims if they are perceived to have contributed to or failed to prevent climate change or environmental damage, including by financing client activities. Banks may face reputational risks related to climate change in various ways, as the public and stakeholders increasingly expect banks to demonstrate their commitment to environmental sustainability. Banks that are perceived as not adequately addressing climate risks may face reputational damage. Additionally, banks can be accused of greenwashing if the information disclosed is misleading or if they are not able to meet their climate goals. Barclays has developed an internal climate risk identification process to identify and assess the potential impact of climate risk as a driver of other principal risks. Drivers of climate risk are identified and collated through quarterly horizon scanning exercises, following which information is disseminated to relevant principal risk teams. Following review by principal risk teams, the relevant information feeds into the Climate Risk Register. The Climate Risk Register is maintained as per the ERMF and is integrated into the Group Risk Register. The Group Risk Register contains all material risks that may impact forward- looking business plans across key legal entities (Barclays PLC, BBUK PLC, BBI PLC) and business units (BUK and BI). Quantitative (typically based on stress testing) or qualitative assessments are performed to quantify the impact of material risks on capital or liquidity positions of legal entities/business units. Following this assessment, each material risk is mapped to key drivers along with the risk ratings (which are derived based on magnitude of impact and materiality thresholds). The Group Risk Register is refreshed on at least an annual basis and is subsequently used to support strategic planning, scenario design, sensitivity analysis and capital adequacy assessments. Barclays has also developed processes to identify sectors, sovereigns and US States which other Principal Risks must prioritise for assessment of climate risks. Within these processes, the Group analyses and assesses the sensitivity and vulnerability of different industry sectors and geographies (including sovereigns and US states) to various physical and transition risk drivers and categorise them into different risk buckets. Following this assessment, the industry sectors and geographies that are highly exposed to climate risks are deemed to be of elevated risk. These assessments are regularly reviewed and benchmarked against external studies and research and incorporate inputs from the subject matter experts. The outcomes of the above mentioned processes namely the Climate Risk Register, elevated sector and geography (including sovereigns and US states) assessments and underlying exposures, form the basis of Barclays' approach and priorities for further granular assessment. Details on exposures to elevated sectors are on pages 284 to 287. In the UK Mortgages portfolio, segments that are vulnerable to subsidence and flood risk have been identified. Additionally, Energy Performance Certificate (EPC) ratings have been identified for portfolios that are particularly vulnerable to transition risk. Methodology and breakdown of subsidence risk and flood risk bands in the portfolio is available on page 288. Additionally, through individual client assessments and scenario analysis exercises, Barclays identifies portfolios that are more vulnerable to climate- related risks. Risk assessment The emissions resulting from the activities of customers and clients to whom financing is provided is measured using Barclays' bespoke tool BlueTrack™. Currently, BlueTrack™ covers nine segments comprising of Energy, Power, Cement, Steel, Automotive Manufacturing, UK Housing, Commercial Real Estate, Agriculture and Aviation. Details on the BlueTrack™ methodology and targets are on pages 86 to 99. Furthermore, Barclays has developed the Client Transition Framework (CTF) to evaluate clients' progress as they transition to a low-carbon business model. Using BlueTrack™ data and public disclosures, the framework evaluates both qualitative and quantitative components to assess transition trajectories against Barclays’ targets and benchmarks. This allows the Group to prioritise engagement with clients based on their CTF scores. Details on the CTF methodology are on page 90. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 275 Principal risk management (continued) During 2023, Barclays conducted industry- specific deep dives to identify risk factors and characteristics for those sectors. For example, the power sector review incorporated analysis of carbon intensity, transition plans and the results of a bespoke power utilities scenario analysis (such as the effect of carbon pricing on client financial performance). Furthermore, Barclays has industry- specific risk management processes where appropriate. Granular asset-level assessment is performed in the oil and gas portfolio, prioritising the assessment of clients that are non-investment grade and operating in the upstream and midstream sub-sectors. Taking into account factors such as breakeven costs, geological concerns, infrastructure constraints and regulatory/geopolitical uncertainty, Barclays has subsequently classified clients and their assets into tiers from 1 to 3, with tier 3 considered the riskiest. Asset tiering and assessment for these clients are reviewed at least annually. For Credit Risk, Barclays continues to embed climate risk assessment into credit assessment, annual review and transaction approval processes to ensure that climate-related risks are considered for Wholesale Credit and Retail customers in elevated risk sectors. At a client level, the Climate Lens questionnaire is used to evaluate physical, transition and environmental risks associated with firms operating in elevated risk sectors. Each question is rated as Low, Moderate or High based on the client’s exposure and vulnerability to various climate and environmental risk factors. Climate Lens is currently being re- developed with the aim of making it more quantitative and improving its integration within the credit processes. For Market Risk, the impact of climate change is measured by applying stress scenarios that stress the core risks susceptible to climate change over long and short-term horizons to individual risk factors. This process is conducted every quarter. The pattern of stress losses arising from the stress scenario is used to estimate and set ongoing limits, consistent with the Board-approved maximum stress loss capacity for Market risk, under which Barclays monitors and controls Market risk arising from climate change. For Treasury and Capital Risk, Barclays’ conducts Group-wide climate stress tests to understand and assess the potential impact on Barclays' capital position. Climate risk considerations have also been incorporated into the Internal Capital Adequacy Assessment Process (ICAAP). For Liquidity Risk, Barclays identifies and assesses potential vulnerabilities of certain industries and asset classes that may deteriorate under a climate stress scenario, and subsequently impact funding and liquidity ratios. Climate risk considerations have also been incorporated into the Internal Liquidity Adequacy Assessment Process (ILAAP). For Pension Risk, key risk indicators based on the impact of physical and transition risk drivers on the pension fund have been defined. These are reviewed and monitored on a quarterly basis. For operational risk, climate-related risks continue to be assessed as part of existing business-as-usual operational risk processes. This includes working with Premises and Operational Recovery Planning teams to evaluate and respond to climate-related impacts and regulatory requirements Climate factors have been integrated into Structured Scenario Assessments, which capture extreme but plausible operational tail risks. As part of the assessment in 2023, climate risk has been included in the building destruction scenario (physical risks) and greenwashing-related scenarios (transition risks). For reputational risk, the primary responsibility for identifying and managing reputation risk and adherence sits with the front line business and support functions where the risk arises. The Enhanced Due Diligence process and other relevant processes in these business units facilitate the assessment of climate-related reputational risk - details on this are on page 236, while details on oversight and management are embedded with the Barclays governance framework on pages 231 to 232. Across Barclays' portfolios, scenario analysis continues to form a key part of the Group’s approach to assessing and quantifying the impact of climate change. Details on the progress and outcomes of our scenario analysis and stress testing exercises are available on pages 131 to 136. Risk monitoring and reporting In addition to the climate risk appetite, Barclays has integrated climate risk considerations into policies, standards and lending guidelines. Consistent with our net zero ambition and taking into account considerations of all relevant business factors, policies have been introduced to progressively curtail or prohibit financing of certain activities in sensitive sectors, including upstream oil and gas, thermal coal mining and coal-fired power generation, Arctic oil and gas, oil sands, hydraulic fracturing (fracking), Amazon oil and gas, extra heavy oil and ultra-deep water. These policies are reviewed regularly and updated with respect to external developments. Details on restrictive policies are on page 100. Mandate and scale (M&S) exposure controls translate risk appetite into a detailed series of limits to control day-to- day risk taking. Barclays has implemented climate-aware limits and controls for priority sectors, including based on, BlueTrack™ measures of emissions intensity and the Client Transition Framework. For the UK retail portfolio, physical and transition risk mandates are in place for the UK Mortgages and Business Banking Agriculture portfolios. Quantitative and qualitative information are presented and reviewed at the CRC. A Group-level climate risk dashboard is presented to BRC on a quarterly basis, which is used to inform progress against sector targets, current exposure to portfolios with high physical and transition risks, concentrations and climate risk trends. The climate dashboard periodically includes outputs and learnings from internal stress test and regulatory exercises and external developments based on horizon scanning. Legal entity specific climate risk dashboards for monitoring and reviewing climate-sensitive exposures have been developed and presented to appropriate committees. Where Climate Risk limits are subject to ongoing monitoring, they will be reported at the appropriate Principal Risk Committees and CRC. Barclays continues to enhance and sophisticate our risk management capabilities with our increased knowledge and ability to quantify and manage climate- related risks. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 276 Principal risk management (continued) Nature Risk Assessment In 2022-23, Barclays participated in a TNFD pilot with UNEP FI, alongside other financial institutions, focused on UK and European agriculture and fisheries, which in the Barclays context means agriculture and food sectors. As part of the pilot programme, we worked with an external expert to test the draft TNFD framework, including the proposed risk assessment process (LEAP FI), on our agriculture and food portfolio in Europe, with a focus on UK farming. As reported last year, this involved assessing our clients’ locations in terms of production and sales and applying a number of different 2030 scenarios to the portfolio. During 2023, we used the results of the pilot to inform the management of nature- related risks identified during the assessment. For example, the results informed the development of new questions for the Client Transition Tool (CTT) for UK farmers, which are due to be incorporated in 2024. This will help identify clients that may need support in managing their nature- related risks alongside decarbonisation actions, and to inform our client engagement proposition. See page 94 for more details on our work with the UK farming sector. Further, in recognition of nature- related impacts identified in the agricultural value chain, we updated our Forestry and Agricultural Commodities Statement, which included strengthening our existing restrictions and introducing additional new restrictions on clients operating in agricultural commodity sectors exposed to significant deforestation risk. See page 100 for details. Credit risk management (audited) The risk of loss to the Group from the failure of clients, customers or counterparties, including sovereigns, to fully honour their obligations to the Group, including the whole and timely payment of principal, interest, collateral and other receivables. Overview The credit risk that the Group faces arises from wholesale and retail loans and advances together with the counterparty credit risk arising from derivative contracts with clients; trading activities, including: • debt securities, settlement balances with market counterparties, fair value through other comprehensive income (FVOCI) assets and reverse repurchase loans. Credit risk management objectives are to: • maintain a framework of controls to oversee credit risk • identify, assess and measure credit risk clearly and accurately across the Group and within each separate business, from the level of individual facilities up to the total portfolio • control and plan credit risk taking in line with external stakeholder expectations, including risk return objectives, and avoiding undesirable concentrations • monitor credit risk and adherence to agreed controls. Organisation, roles and responsibilities The first line of defence has primary responsibility for managing credit risk within the risk appetite and limits set by the Risk function, supported by a defined set of policies, standards and controls. In the entities, business risk committees (attended by the first line) monitor and review the credit risk profile of each business unit where the most material issues are escalated to the Retail Credit Risk Management Committee, Wholesale Credit Risk Management Committee and Group Risk Committee. Wholesale and retail portfolios are managed separately to reflect the differing nature of the assets; wholesale balances tend to be larger and are managed on an individual basis, while retail balances are greater in number but lesser in value and are, therefore, managed in aggregated segments. The responsibilities of the credit risk management teams in the businesses, the sanctioning team and other shared services include: sanctioning new credit agreements (principally wholesale); setting strategies for approval of transactions (principally retail); setting risk appetite; monitoring risk against limits and other parameters; maintaining robust processes, data gathering, quality, storage and reporting methods for effective credit risk management; performing effective turnaround and workout scenarios for wholesale portfolios via dedicated restructuring and recoveries teams; maintaining robust collections and recovery processes/units for retail portfolios; and review and validation of credit risk measurement models. The credit risk management teams in each legal entity are accountable to the relevant Legal Entity CRO, who reports to the Group CRO. For wholesale portfolios, credit risk managers are organised in sanctioning teams by geography, industry and/or product. In wholesale portfolios, credit risk approval is undertaken by experienced credit risk professionals operating within a clearly defined delegated authority framework, with only the most senior credit officers assigned the higher levels of delegated authority. The largest credit exposures, which are outside the Risk Sanctioning Unit or Risk Distribution Committee authority, require the support of a legal entity Senior Credit Officer. For exposures in excess of the legal entity Senior Credit Officer’s authority, approval by Group Senior Credit Officer/Board Risk Committee is also required. The Group Credit Risk Committee, attended by legal entity Senior Credit Officers, provides a formal mechanism for the Group Senior Credit Officer to exercise the highest level of credit authority over the most material Group single name exposures. Credit risk mitigation The Group employs a range of techniques and strategies to actively mitigate credit risks. These can broadly be divided into three types: • netting and set-off • collateral • risk transfer. Netting and set-off Credit risk exposures can be reduced by applying netting and set-off. For derivative transactions, the Group’s normal practice is, on a legal entity basis, to enter into standard master agreements with counterparties (e.g. ISDAs). These master agreements typically allow for netting of credit risk exposure to a counterparty resulting from derivative transactions against the obligations to the counterparty in the event of default, and so produce a lower net credit exposure. These agreements may also reduce settlement exposure (e.g. for foreign exchange transactions) by allowing payments on the same day in the same currency to be set- off against one another. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 277 Principal risk management (continued) Collateral The Group has the ability to call on collateral in the event of default of the counterparty, comprising: • home loans: a fixed charge over residential property in the form of houses, flats and other dwellings • wholesale lending: a fixed charge over commercial property and other physical assets, in various forms • other retail lending: includes charges over other physical assets; second lien charges over residential property; and finance lease receivables • derivatives: the Group also often seeks to enter into a margin agreement (e.g. Credit Support Annex) with counterparties with which the Group has master netting agreements in place. These annexes to master agreements provide a mechanism for further reducing credit risk, whereby collateral (margin) is posted on a regular basis (typically daily) to collateralise the mark to market exposure of a derivative portfolio measured on a net basis • reverse repurchase agreements: collateral typically comprises highly liquid securities which have been legally transferred to the Group subject to an agreement to return them for a fixed price • financial guarantees and similar off- balance sheet commitments: cash collateral may be held against these arrangements. Risk transfer A range of instruments including guarantees, credit insurance, credit derivatives and securitisation can be used to transfer credit risk from one counterparty to another. These mitigate credit risk in three main ways: • if the risk is transferred to a counterparty which is more creditworthy than the original counterparty, then overall credit risk is reduced • where recourse to the first counterparty remains, both counterparties must default before a loss materialises. This is less likely than the default of either counterparty individually so credit risk is reduced. • first loss exposures across pools of • model maintenance: monitoring of credit risk can be hedged via synthetic securitisation structures, typically via CLN (credit lending notes) issuance. As these are fully funded upfront they provide for a direct reduction in credit risk exposure on referenced pools. + Detailed policies are in place to appropriately recognise and record credit risk mitigation. For more information, refer to pages 131 to 134 of the Barclays PLC Pillar 3 Report 2023 (unaudited). Governance and oversight of ECLs under IFRS 9 The Group’s organisational structure and internal governance processes oversee the estimation of ECL across several areas, including: i) setting requirements in policy, including key assumptions and the application of key judgements; ii) the design and execution of models; and iii) review of ECL results. i) Impairment policy requirements are set and reviewed regularly, at a minimum annually, to maintain adherence to accounting standards. Key judgements inherent in policy, including the estimated life of revolving credit facilities and the quantitative criteria for assessing the significant increase in credit risk (SICR), are separately supported by analytical study. In particular, the quantitative thresholds used for assessing SICR are subject to a number of internal validation criteria, particularly in retail portfolios where thresholds decrease as the origination Probability of Default (PD) of each facility increases. Key policy requirements are also aligned to the Group’s credit risk management strategy and practices, for example, wholesale customers that are risk managed on an individual basis are assessed for ECL on an individual basis upon entering Stage 3; furthermore, key internal risk management indicators of high risk are used to set SICR policy, for example, retail customers identified as high risk account management are automatically deemed to have met the SICR criteria. ii) ECL is estimated in line with internal policy requirements using models which are validated by a qualified independent party to the model development area, the Independent Validation Unit (IVU), before first use and on a regular basis, at a minimum every three years. Each model is designated an owner who is responsible for: model performance including backtesting by comparing predicted ECL versus flow into stage 3 and coverage ratios; proposing material changes for independent IVU approval; and recalibrating model parameters on more timely data • proposing post-model adjustments (PMA) to address model weaknesses or to account for situations where known or expected risk factors and information have not been considered in the modelling process. All PMAs relating to model deficiencies, regardless of value are approved by IVU for a set time period. PMAs representing Expert Judgement are validated by Risk, as the second line of defence and approved for a set time period. The most material PMAs are also approved by the CRO. Models must also assess ECL across a range of future economic conditions. These economic scenarios are generated via an independent model and ultimately set by the Senior Scenario Review Committee. Economic scenarios are regenerated at a minimum twice annually but more frequently if deemed appropriate, and also to align with the Group’s medium term planning exercise. Each model used in the estimation of ECL, including key inputs, are governed by a series of internal controls, which include the validation of completeness and accuracy of data in golden source systems, documented data transformations and documented lineage of data transfers between systems. iii) The Group Impairment Committee, formed of members from both Finance and Risk and attended by both the Group Finance Director and the Group CRO, is responsible for overseeing impairment policy and practice across the Group and will approve impairment results. Reported results and key messages are communicated to the BAC, which has an oversight role and provides challenge of key assumptions, including the basis of the scenarios adopted. Impairment results are then factored into management decision making, including but not limited to, business planning, risk appetite setting and portfolio management. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 278 Principal risk management (continued) Market risk management (audited) The risk of loss arising from potential adverse changes in the value of the Group’s assets and liabilities from fluctuation in market variables including, but not limited to, interest rates, foreign exchange, equity prices, commodity prices, credit spreads, implied volatilities and asset correlations. Overview Market risk arises primarily as a result of client facilitation in wholesale markets, involving market-making activities, risk management solutions and execution of syndications. Upon execution of a trade with a client, the Group will look to hedge against the risk of the trade moving in an adverse direction. Mismatches between client transactions and hedges result in market risk due to changes in asset prices, volatility or correlations. Organisation, roles and responsibilities Market risk in the businesses resides primarily in Barclays International and Treasury. These businesses have the mandate to assume market risk. The front office and Treasury trading desks are responsible for managing market risk on a day-to-day basis, where they are required to understand and adhere to all limits applicable to their businesses. The Market Risk team supports the trading desks with the day-to-day limit management of market risk exposures through governance processes which are outlined in supporting market risk policies and standards. Market risk oversight and challenge is provided by business committees and Group committees, including the Market Risk Committee (MRC). The objectives of market risk management are to: • identify, understand and control market risk by robust measurement, limit setting, reporting and oversight • facilitate business growth within a controlled and transparent risk management framework • control market risk in the businesses according to the allocated appetite. To meet the above objectives, a governance structure is in place to manage these risks consistent with the ERMF. The BRC recommends market risk appetite to the Board for their approval. The Market Risk Principal Risk Lead (PR Lead) is responsible for the Market Risk Control Framework and, under delegated authority from the Group CRO, agrees with the business CROs a limit framework within the context of the approved market risk appetite. The Market Risk Committee (MRC) reviews and makes recommendations concerning the group-wide market risk profile. This includes overseeing the operation of the Market Risk Framework and associated policies and standards, monitoring market and regulatory changes, and reviewing limit utilisation levels. The committee is chaired by the PR Lead and attendees include the business heads of market risk and business aligned market risk managers. In addition to MRC, the Corporate and Investment Bank Risk Committee (‘CIBRC’) is the main forum in which market risk exposures are discussed and reviewed with senior business heads. The Committee is chaired by the CRO of Barclays International and meets weekly, covering current market events, notable market risk exposures, and key risk topics. New business initiatives are generally socialised at CIBRC before any changes to risk appetite or associated limits are considered in other governance committees. The head of each business is accountable for all market risks associated with its activities, while the head of the market risk team covering each business is responsible for implementing the risk control framework for market risk. For more information on market risk management, refer to the Barclays PLC Pillar 3 Report 2023 (unaudited). Management value at risk (VaR) VaR is an estimate of the potential loss arising from unfavourable market movements if the current positions were to be held unchanged for one business day. For internal market risk management purposes, a historical simulation methodology with a one-year equally weighted historical period, at the 95% confidence level is used for all trading books and some banking books. Limits are applied at the total level as well as by risk factor type, which are then cascaded down to particular trading desks and businesses by the market risk management function. + See the market risk performance section for a review of management VaR. Treasury and capital risk management This comprises: Liquidity risk: The risk that the Group is unable to meet its contractual or contingent obligations or that it does not have the appropriate amount, tenor and composition of funding and liquidity to support its assets. Capital risk: The risk that the Group has an insufficient level or composition of capital to support its normal business activities and to meet its regulatory capital requirements under normal operating environments and stressed conditions (both actual and as defined for internal planning or regulatory testing purposes). This also includes the risk from the Group’s pension plans. Interest rate risk in the banking book: The risk that the Group is exposed to capital or income volatility because of a mismatch between the interest rate exposures of its (non-traded) assets and liabilities. The Treasury function manages treasury and capital risk exposure on a day-to-day basis with the Group Treasury Committee acting as the principal management body. The Treasury and Capital Risk function is responsible for oversight and provides insight into key capital, liquidity, interest rate risk in the banking book (IRRBB) and pension risk management activities. Liquidity risk management (audited) Overview The efficient management of liquidity is essential to the Group in order to retain the confidence of the financial markets and maintain the sustainability of the business. Treasury and Capital Risk have created a framework to manage all liquidity risk exposures under both normal and stressed conditions. The framework is designed to maintain liquidity resources that are sufficient in amount, quality and funding tenor profile to remain within the liquidity risk appetite as expressed by the Barclays PLC Board. The liquidity risk appetite is monitored against both internal and regulatory liquidity metrics. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 279 Principal risk management (continued) Organisation, roles and responsibilities Treasury has the primary responsibility for managing liquidity risk within the set risk appetite. Both Risk and Treasury contribute to the production of the Internal Liquidity Adequacy Assessment Process (ILAAP). The Treasury and Capital Risk function is responsible for the management and governance of the liquidity risk mandate, as defined by the Board. The framework established by Treasury and Capital Risk is designed to deliver the appropriate term and structure of funding, consistent with the liquidity risk appetite set by the Board. The framework incorporates a range of ongoing business management tools to monitor, limit and stress test the Group’s balance sheet, contingent liabilities and the recovery plan. Limit setting and transfer pricing are tools designed to control the level of liquidity risk taken and drive the appropriate mix of funds. Adherence to limits reduces the likelihood that a liquidity stress event could lead to an inability to meet Group’s obligations as they fall due. The Board approves the Group funding plan, internal stress tests, regulatory stress test results, recovery plan and liquidity risk appetite. The Group Treasury Committee is responsible for monitoring and managing liquidity risk in line with the Group’s funding management objectives, funding plan and risk appetite. The Treasury and Capital Risk Committee monitors and reviews the liquidity risk profile and control environment, providing second line oversight of the management of liquidity risk. The BRC reviews the risk profile, and reviews liquidity risk appetite at least annually and the impact of stress scenarios on the Group funding plan/ forecast in order to agree the Group’s projected funding abilities. Capital risk management (audited) Overview Capital risk is managed through ongoing monitoring and management of the capital and leverage position, regular stress testing and a robust capital governance framework. The objectives of the framework are to maintain adequate capital for the Group and legal entities to withstand the impact of the risks that may arise under normal and stressed conditions, and maintain adequate capital to cover current and forecast business needs and associated risks to provide a viable and sustainable business offering. The Group aims to prudently manage its overall leverage position (including risk of excessive leverage) by utilising plausible stress scenarios, reviewing and deploying management actions in response to deteriorating economic and commercial positions. In order to manage contingent leverage risk, the Group considers the context from which the business consumption arises, the impact of client utilisation on leverage and the available actions to manage. Organisation, roles and responsibilities Treasury has the primary responsibility for managing and monitoring capital adequacy. The Treasury and Capital Risk function provides oversight of capital risk. Production of the Barclays PLC Internal Capital Adequacy Assessment Process (ICAAP) is the responsibility of Treasury. Capital risk management is underpinned by a control framework and policy. The capital management strategy, outlined in the Group and legal entity capital plans, is developed in alignment with the control framework and policy for capital risk, and is implemented consistently in order to deliver on the Group’s objectives. The Board approves the Group capital plan, internal stress tests and results of regulatory stress tests, and the Group recovery plan. The Group Treasury Committee is responsible for monitoring and managing capital risk in line with the Group’s capital management objectives, capital plan and risk frameworks. The Treasury and Capital Risk Committee monitors and reviews the capital risk profile and control environment, providing second line oversight of the management of capital risk. The BRC reviews the risk profile, and reviews risk appetite at least annually and the impact of stress scenarios on the Group capital plan/forecast in order to agree the Group’s projected capital adequacy. Local management assures compliance with an entity’s minimum regulatory capital requirements by reporting to local Asset and Liability Committees (ALCOs) with oversight by the Group Treasury Committee, as required. In 2023, Barclays complied with all regulatory minimum capital requirements. Contingent leverage risk is managed by; i) setting comprehensive leverage (and RWA) targets for each business as part of the Treasury capital management process, taking into account adherence to early warning indicators and maintain a healthy leverage ratio, and; ii) Monitoring execution of actions taken to course-correct as necessary. The Group maintains a number of defined benefit pension schemes for past and current employees. The ability of schemes to meet pension payments is achieved with investments and contributions. Pension risk arises because the market value of pension fund assets might decline; investment returns might reduce; or the estimated value of pension liabilities might increase. The Group monitors the pension risks arising from its defined benefit pension schemes and works with the relevant pension fund’s trustees to address shortfalls. In these circumstances, the Group could be required or might choose to make extra contributions to the pension fund. The Group’s main defined benefit scheme was closed to new entrants in 2012. Interest rate risk in the banking book management (IRRBB) Overview Interest rate risk in the banking book is driven by customer deposit taking and lending activities, investments in the liquid asset portfolio and funding activities. As per the Group’s policy to remain within the defined risk appetite, hedging strategies are executed to mitigate the various IRRBB risks that result from these activities. However, the Group remains susceptible to interest rate risk and other non-traded market risks from the following key sources: • Interest rate and repricing risk: the risk that net interest income could be adversely impacted by a change in interest rates, differences in the timing of interest rate changes between assets and liabilities, and other constraints on interest rate changes as per product terms and conditions. • Customer behavioural risk: the risk that net interest income could be adversely impacted by the discretion that customers and counterparties may have in respect of being able to vary from their contractual obligations with Barclays. This risk is often referred to by industry regulators as ‘embedded option risk’. • Investment risks in the liquid asset portfolio: the risk that the fair value of assets held in the liquid asset portfolio and associated risk management portfolios could be adversely impacted by market volatility, creating volatility in capital directly. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 280 Principal risk management (continued) Organisation, roles and responsibilities The entity ALCOs and/or treasury committees, together with the Group Treasury Committee, are responsible for monitoring and managing IRRBB risk in line with the Group’s management objectives and risk frameworks. The GRC and Treasury and Capital Risk Committee monitors and reviews the IRRBB risk profile and control environment, providing second line oversight of the management of IRRBB. The BRC reviews the interest rate risk profile, including review of the risk appetite at least annually and the impact of stress scenarios on the interest rate risk of the Group’s banking books. In addition, the Group’s IRRBB policy sets out the processes and key controls required to identify all IRRBB risks arising from banking book operations, to monitor the risk exposures via a set of metrics with a frequency in line with the risk management horizon, and to manage these risks within agreed risk appetite and limits. Model risk management The potential for adverse consequences from decisions based on incorrect or misused model outputs and reports. Overview The Bank uses models to support a broad range of activities, including informing business decisions and strategies, measuring and limiting risk, valuing exposures, conducting stress testing, assessing capital adequacy, managing client assets, and meeting reporting requirements. Organisation, roles and responsibilities The Barclays Group has a dedicated Model Risk Management (‘MRM’) function that consists of six teams: (i) Independent Validation Unit (‘IVU’), responsible for model validation and approval; (ii) Group Model Risk Governance, responsible for model risk governance, controls and reporting, as well as providing oversight for compliance of the Model Owner community with the Model Risk Framework; (iii) Framework team, responsible for the Model Risk Policy and associated standards; (iv) Infrastructure Delivery and Oversight, responsible for the delivery of model inventory including associated data quality & reporting and oversight of Quantitative Processes; (v) COO, responsible for strategy, communications and business management; and (vi) Model Risk Measurement and Quantification (‘MRMQ’), responsible for the design of the framework and methodology to measure and, where possible, quantify model risk. It is also responsible for the strategic Validation Centre of Excellence (‘VCoE’), which is an independent quality assurance function within MRM with the mandate to review and challenge validation outcomes. VCoE is aligned to the Group Model Risk Governance team. The Group Model Risk Committee is MRM’s primary risk committee and a subcommittee of the Group Risk Committee. It is convened with senior executives in the first and second line of defence to oversee the model risk profile and risk appetite. The Model Risk Framework is defined and implemented through Model Risk Policy and Standards that prescribe the Barclays Group-wide, end-to-end requirements for the identification, measurement and management of model risk, covering model documentation, development, testing, monitoring, annual review, independent validation and approval, change and reporting processes. The function reports to the Barclays Group CRO and operates a global framework. Implementation of best practice standards is a central objective of the Barclays Group. The key model risk management activities include: • Correctly identifying models across all relevant areas of the Bank and recording models in the Barclays Group Models Database (‘GMD’), the Barclays Group- wide model inventory. • Enforcing that every model has a model owner who is accountable for the model. The model owner must sign off models prior to submission to the Independent Validation Unit (IVU) for validation and ensure that the model presented to IVU is and remains fit for purpose. • Overseeing that every model is subject to validation and approval by IVU, prior to use and on a continual basis. • Defining the model risk appetite in terms of risk tolerance, and qualitative metrics which are used to track and report on model risk. Operational risk management The risk of loss to the Group from inadequate or failed processes or systems, human factors or due to external events (for example, fraud) where the root cause is not due to credit or market risks. Overview The management of operational risk has three key objectives: • deliver and oversee an operational risk capability owned and used by business leaders to enable sound risk decisions over the long term • provide the frameworks, policies and standards to enable management to meet their risk management responsibilities while the second line of defence provides robust, independent, and effective oversight and challenge • deliver a consistent and aggregated measurement of operational risk that will provide clear and relevant insights, so that the right management actions can be taken to keep the operational risk profile consistent with the Group’s strategy, the stated risk appetite and stakeholder needs. The Group operates within a system of internal controls that enables business to be transacted and risk taken without exposing it to unacceptable potential losses or reputational damages. Organisation, roles and responsibilities The prime responsibility for the management of operational risk and the compliance with control requirements rests within the business and functional units where the risk arises. The operational risk profile and control environment is reviewed by management through business risk committees and control committees. Operational risk issues escalated from these meetings are considered through the second line of defence review meetings. Depending on their nature, the outputs of these meetings are presented to the Operational Risk Profile Forum, the Operational Risk Committee, the BRC or the BAC. In addition, specific reports are prepared by Operational Risk on a regular basis for the GRC and the BRC. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 281 Principal risk management (continued) Legal entities, businesses and functions are required to report their operational risks on both a regular and an event-driven basis. The reports include a profile of the material risks that may threaten the achievement of their objectives and the effectiveness of key controls, operational risk events and a review of scenarios. The Group Head of Operational Risk is responsible for establishing, owning and maintaining an appropriate group-wide Operational Risk Framework and for overseeing the portfolio of operational risk across the Group. The Operational Risk function acts in a second line of defence capacity, and is responsible for defining and overseeing the implementation of the framework and monitoring the Group’s operational risk profile, including risk-based review and challenge. The Operational Risk function alerts management when risk levels exceed acceptable tolerance in order to drive timely decision- making and actions by the first line of defence. Operational risk categories Operational risks are grouped into risk categories to support effective risk management, measurement and reporting. These comprise: Data Management Risk; Financial Reporting Risk; Fraud Risk; Information Security Risk; Operational Recovery Planning Risk; Payments Process Risk; People Risk; Premises Risk; Physical Security Risk; Change Delivery Management Risk; Supplier Risk; Tax Risk; Technology Risk; and Transaction Operations Risk. In addition to the above, operational risk encompasses risks associated with compliance with Group Resolution Planning Prudential regulatory requirements. + For definitions of the Group’s Operational Risk Categories and connected risks, refer to the management of operational risk section in the Barclays PLC Pillar 3 Report 2023. Compliance Risk management The risk of poor outcomes for, or harm to, customers, clients and markets, arising from the delivery of the Group’s products and services (conduct risk), and the risk to Barclays, its clients, customers or markets from a failure to comply with the laws, rules and regulations (LRR) applicable to the firm. Overview Compliance risk incorporates market integrity, customer protection, financial crime, product design and review, and the newly created laws, rules and regulation risks. Barclays has no appetite to operate its business other than in full accordance with all applicable laws, rules and regulations, in order to deliver good outcomes for / avoid harm to customers, clients and markets. Barclays will act in good faith; seeking to avoid causing foreseeable harm and to enable and support customers to pursue their financial objectives. Organisation, roles and responsibilities The Compliance Risk Management Framework (CRMF) outlines how the Group manages and measures its conduct risk profile. The Group Chief Compliance Officer is accountable for developing, maintaining and overseeing the CRMF. This includes defining and owning the relevant compliance risk policies which detail the control objectives, principles and other core requirements for the activities of the Group. It is the responsibility of the first line of defence to establish conduct related controls to manage its performance and assess conformance to these policies and controls. The responsibility for LRR risk management sits across various functions and business units, including Legal, Chief Controls Office, Risk and Compliance. Senior managers are accountable within their areas of responsibility for owning and managing compliance risk in accordance with the CRMF, as defined within their regulatory Statement of Responsibilities, and a dedicated team has been established in Compliance to oversee LRR risk management. Compliance as an independent second line function oversees that compliance risks are effectively identified, managed, monitored and escalated, and has a key role in helping Barclays achieve the right conduct outcomes and evolve a compliance-focused culture. The governance of Compliance risk within the Group is fulfilled through management committees and forums operated by the first and second lines of defence with clear escalation and reporting lines to the Board. The Barclays Group and Barclays Bank Group Risk Committee and the Barclays Bank UK Group Risk Committee are the primary second line governance committees for the oversight of the Compliance Risk Profile. The risk committees’ responsibilities include the identification and discussion of any emerging compliance risk exposures in the Barclays Group and Barclays Bank Group. A new sub-committee of the Group Risk Committee was established in August 2023 to provide oversight on LRR risk. This committee is chaired by the Group Chief Compliance Officer. Compliance Risk By effectively managing Compliance risks, we can continue to strengthen the culture of Barclays. Culture and conduct We believe the stronger our culture, the better the choices our people will make; and the stronger our business will be for all our stakeholders. While our culture helps us reduce the impact of poor conduct on our customers, we also do not intend to repeat the errors of the past. Our most senior leaders spend significant time setting the right tone at Barclays and our Purpose and Values are now deeply embedded in their messages. The Barclays Way sets out the standards and behaviour all employees must demonstrate and guides the execution of our business. We also strengthen our culture with clear and effective controls. We continue investing to enhance our controls to support our commitment to conducting all activities with integrity. + For details of the Board's role in embedding our Culture, Purpose, Values and Mindset, please refer to page 154 of the Directors' Report. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 282 Principal risk management (continued) The Barclays Mindset Our Mindset acts as an operating manual for how to get things done at Barclays. It focuses on three key elements that are core to our success – Empower, Challenge and Drive. Our research shows that when we demonstrate behaviours aligned to these three elements, outcomes are better, colleagues are more engaged and they are more likely to stay longer to build their career at Barclays. + For further details, see page 27 in the Strategic Report for more information on the Barclays Mindset. Managing Compliance risks See page 179 in the Directors' report in + addition to pages 269 and 361 in the risk review section for more information on how the Group defines, manages and mitigates Compliance risks. Product design and review risk It is important that the design of our products and services meets the needs of clients, customers and markets as well as being aligned with Barclays' policies. We do this by operating two processes, which together form our product design and review risk framework. We have a process that supports the Group in the approval and implementation of New and Amended Products and Approval process (known as the NAPA Process, set out in the Barclays NAPA Policy and Standards). This process outlines the requirements and risk assessment standards that must be met to help ensure that new and amended products and services are appropriately designed prior to their launch. In addition we have a complementary process that reviews the existing portfolio of products and services throughout their lifecycle (known as the Product Review Process, set out in the Barclays Product Review Policy and Standard). This process considers information about the performance and operation of the product or service through a conduct lens. Wherever a product or service is found to be outside appetite, the product or service owner must seek to ensure actions are taken to address it. These actions are validated by functional areas, including Legal and Compliance. Areas of Barclays that undertake Investment activity also operate additional product governance processes and controls, reflecting the higher risk of these more complex products and the importance of products and services meeting the needs of our Clients. + The BPLC, BBPLC and BBUKPLC Board Risk Committees review, on behalf of their respective Boards, the management of Compliance risk and the Compliance risk profile for their respective entities. Please refer to the report of the BPLC Board Risk Committee on pages 174 and 179 and the reports of the BBPLC and BBUKPLC Board Risk Committees within the BBPLC and BBUKPLC 2023 Annual Reports available at home.barclays/investor-relations/reports- and-events/annual-reports/ for more information. Customer communications It is important that our engagement with our customers is open and honest and that we treat them fairly to avoid foreseeable harm and to make sure they are not exploited or misled. Barclays continues to take steps to ensure that our customers’ needs and priorities are understood before making recommendations and that the communications we provide allow informed decisions to be made. We work to achieve this through a number of controls which focus on ensuring our customers receive clear information in order to understand the risks and benefits of the products we offer. For example: • communications are sufficient, targeted and distributed to recipients whom Barclays knows or reasonably believes may stand to benefit from the communication, and are communicated in a manner and style that will be understood by the average recipient (or likely recipient), • communications are withdrawn from further circulation when they are no longer accurate or fit for purpose, and • customers do not receive inadequate advice, misleading information, unsuitable products or unacceptable service. Our processes include a review of relevant communications which are supported by the Compliance and Legal functions to help ensure we meet both internal customer engagement standards and we are compliant with external regulations. Furthermore annual mandatory training is completed by marketing colleagues. The training covers key customer and brand standards along with the role and key policies set by external regulators e.g. regulatory requirements may require communications to be provided that are accessible to customers, or provide customers with the option to 'opt out'. Remediation and redress Barclays recognises that customer detriment may occur as a result of our error, actions or inactions, and that we must undertake appropriate activity designed to ensure our customers are put back in the position they would have been in had the issue not occurred. Remediation can be proactive, where we have identified the issue ourselves (for example through identifying a pattern in customer complaints), or reactive, where identified by a third party such as a regulator of Barclays. Where it is appropriate, Barclays works to ensure the operation of consistent principles for remediation which includes timely notification to the relevant regulatory bodies. Reputation Risk management The risk that an action, transaction, investment, event, decision, or business relationship will reduce trust in the Group’s integrity and/or competence. Overview A reduction of trust in the Group’s integrity and competence may reduce the attractiveness of the Group to stakeholders and could lead to negative publicity, loss of revenue, regulatory or legislative action, loss of existing and potential client business, reduced workforce morale and difficulties in recruiting talent. Ultimately it may destroy shareholder value. Strategic report Climate and sustainability report Shareholder information Governance Risk review Financial review Financial information Barclays PLC Annual Report 2023 283 Principal risk management (continued) Organisation, roles and responsibilities Legal Risk management Organisation, roles and responsibilities The risk of loss or imposition of penalties, damages or fines from the failure of the firm to meet applicable laws, rules, regulations or contractual requirements or assert or defend its intellectual property rights. Overview The multitude of laws and regulations across the globe are highly dynamic and their application to particular circumstances is often unclear. This results in a high level of inherent legal risk which the Group seeks to mitigate through the operation of a Group-wide legal risk management framework. This seeks to mitigate legal risk, including through the implementation of Group-wide legal risk policies requiring engagement of legal professionals in situations that have the potential for legal risk, identification and management of legal risks by those professionals, and escalation of legal risk as necessary. Legal Risk is also mitigated by the complementary requirements of the compliance risk management framework, including the responsibility of legal professionals to proactively identify, communicate and provide legal advice on applicable laws, rules and regulations. Notwithstanding these mitigating actions, the Group operates with a level of residual legal risk, for which the Group has limited tolerance. Barclays PLC Board is the most senior body responsible for reviewing and monitoring the effectiveness of the Group’s management of reputation risk. The Group Chief Compliance Officer is accountable for developing a Reputation Risk Management Framework (RRMF), and the Head of Public Policy and Corporate Responsibility is responsible for the publication of appropriate Reputation Risk policies and associated standards, including tolerances against which data is monitored, reported on and escalated, as required. The RRMF sets out what is required to manage reputation risk across the Group. The primary responsibility for identifying and managing reputation risk and adherence to the control requirements sits with the business and support functions where the risk arises. Barclays Bank Group and Barclays Bank UK Group are required to operate within established reputation risk appetite, and their component businesses prepare reports highlighting their most significant current and potential reputation risks and issues and how they are being managed. These reports are a key internal source of information for the quarterly reputation risk reports which are prepared for Barclays Group ExCo and reviewed by the Group Board twice-yearly. The Group Reputation Risk Committee is a sub-committee of the Group Executive Committee, authorised to manage material reputation risks and issues as they are brought to the attention of the committee via relevant reputation risk assessment and escalation processes. The Group's businesses and functions have responsibility for identifying and escalating to the Legal Function legal risk in their areas, as well as responsibility for adherence to control requirements. The Legal Function organisation and coverage model aligns legal expertise to businesses, functions, products, activities and geographic locations so that the Group receives legal advice and support from appropriate legal professionals, working in partnership proactively to identify, manage and escalate legal risks as necessary. The senior management of the Legal Function oversees, challenges and monitors the legal risk profile and effectiveness of the legal risk control environment across the Group. The Legal Function provides support to all areas of the bank and is not formally part of any of the three lines of defence. Except in relation to the legal advice it provides or procures, the Legal Function is subject to oversight from the second line of defence with respect to its own operational and compliance risks, as well as with respect to the legal risk to which the bank is exposed. The Group General Counsel is responsible for developing and maintaining a Group- wide legal risk management framework. This includes defining the relevant legal risk policies, producing the Group-wide risk appetite statement for legal risk, and oversight of the implementation of controls to manage and escalate legal risk. The legal risk profile and control environment is reviewed by management through business risk committees and control committees. The Group Risk Committee is the most senior executive body responsible for reviewing and monitoring the effectiveness of risk management across the Group. Escalation paths from this committee exist to the Barclays PLC Board Risk Committee. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 284 Risk performance - Climate risk Climate risk performance Carbon-related assets According to TCFD, certain industry segments are more likely to be financially impacted than others due to their exposure to certain transition and physical risks around greenhouse gas (GHG) emissions, energy, or water dependencies associated with their operations and products. These non-financial industries are grouped into four key areas: Energy; Transportation; Materials and Buildings; and Agriculture, Food, and Forest Products. Barclays’ exposures to the industries within these groups are reported as carbon-related assets and can be found in the table on the following page. Elevated risk sectors Based on portfolio level assessments (including for industry sectors) on climate risk, Barclays identifies and categorises sectors with heightened risk to climate change as elevated sectors. However, in each sector there are a range of vulnerabilities, meaning not all of our clients in these sectors have high emissions, and accordingly should not be interpreted as an indicator of relative carbon intensity. Residential Real Estate exposures are also included in this table. Barclays recognises Residential Real Estate portfolio as elevated risk, therefore on that basis they have been included in the table. The sectors highlighted blue in the table represent the sectors considered as elevated at the Group level. Elevated risk sector Example drivers of risk Aviation Automotive Cement Coal Mining and Coal Terminals Chemicals Mining (including diversified miners) Oil and Gas Power Utilities Agriculture More stringent air emission and carbon regulations, requiring high levels of capital investment and Research & Development (R&D) expenditure. Vulnerable to shift in consumer preferences. Policy pressure to cut emissions to meet emission requirements, requiring high levels of capital investment and R&D expenditure. Phase out of fossil fuel vehicles and introduction of low emission zones in city centres. Being one of the hard to abate sectors, policy pressure to cut emissions requires high levels of capital investment and R&D expenditure. Reduction in demand of thermal coal, as utilities transition away from fossil fuel. More stringent air emissions regulation, resulting in higher levels of capital investment. Technological advances in low-carbon and sustainable alternatives along with new and more stringent environmental regulations, including carbon tax. The increasing efforts to eliminate single-use plastics and improve recycling to prevent marine pollution could also impact demand for products used in plastic manufacture. Rising costs as a result of tighter environmental regulations and increasing water stress, vulnerable to litigation cases and reputational damage. Policy pressure to cut emissions, exposure to carbon taxes and overall increasing environmental regulation of operations and restrictions on access to new resources. Over time, falling demand for fossil fuels. Policy pressure to cut emissions and move to renewable sources of energy, leading to increased capital expenditure costs, plus potential exposure to carbon taxes. Evolving taxation on emissions may impact production methods, supply chain and farm viability. Reduced demand for meat and dairy as a consequence of shifts in consumer behaviour. Volatile weather conditions and extreme weather events may impact farm credit quality Residential Real Estate Evolving minimum energy efficiency requirements and increasing physical risks from flood, subsidence and coastal erosion have the potential to impact house prices and homeowner affordability. Shipping Steel Road Haulage More stringent carbon tax regulations and policy pressure to cut emissions and adopt low-emission fuels, requiring higher levels of R&D expenditure and capital investment. Being an energy-intensive sector, the sector is exposed to the policy pressure to cut emissions and evolving air pollution regulation . Policy pressure to cut emissions, requiring high levels of capital investment. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 285 Risk performance - Climate risk (continued) Carbon-related assets (Incl. sub-sector breakdown)1,2 2023 £m 2022 £m Loans & advances3 Loan commitments4 Total Loans & advances3 Loan commitments4 Total % Change Agriculture, Food and Forest Products (logging) Agriculture Energy & Waters Power Utilities Metals (waste & recycling) Manufacturing Automotive Cements Chemicals Food, Bev and Tobacco Manufacturing - Others Metals Oil and Gas (refining) Packaging Manufacturers: Metal, Glass and Plastics Paper and Forest Products (excluding logging) Steel Materials and Building Construction and Materials Homebuilding and Property Development Real Estate Management and Development Mining and Quarrying 5 Mining (incl. diversified miners) Oil and Gas (extraction) Transport & storage Aviation Oil and Gas (midstream) Other Transport Services Ports Road Haulage Shipping Wholesale and Retail Distribution and Leisure Oil and Gas (wholesale) Others Other Financial Institutions Real Estate Management and Development (REITs) Home Loans Residential Real Estate Subtotal (Elevated risk sectors) 3,597 3,597 1,019 948 71 6,030 858 161 372 962 3,118 157 60 113 186 43 23,650 452 3,272 19,926 1,714 221 1,493 1,869 262 328 687 75 398 119 1,628 375 1,253 515 515 171,512 171,512 180,747 914 914 13,141 13,049 92 31,449 5,691 381 3,947 5,705 12,710 408 1,411 303 748 145 10,640 641 2,247 7,752 8,370 1,705 6,665 7,139 2,349 2,187 1,263 124 417 799 5,417 2,139 3,278 1,726 1,726 8,226 8,226 50,025 4,511 4,511 14,160 13,997 163 37,479 6,549 542 4,319 6,667 15,828 565 1,471 416 934 188 34,290 1,093 5,519 27,678 10,084 1,926 8,158 9,008 2,611 2,515 1,950 199 815 918 7,045 2,514 4,531 2,241 2,241 179,738 179,738 230,772 3,762 3,762 2,536 2,481 55 6,773 968 222 474 908 3,537 261 100 95 168 40 25,024 802 3,521 20,701 1,528 201 1,327 2,297 465 328 647 95 453 309 2,554 995 1,559 941 941 173,770 173,770 185,895 822 822 13,463 13,318 145 32,161 5,493 160 4,223 6,111 13,180 479 1,375 314 642 184 10,980 752 2,126 8,102 8,759 2,262 6,497 7,012 2,221 2,426 1,166 87 429 683 4,326 1,615 2,711 2,853 2,853 12,170 12,170 4,584 4,584 15,999 15,799 200 38,934 6,461 382 4,697 7,019 16,717 740 1,475 409 810 224 36,004 1,554 5,647 28,803 10,287 2,463 7,824 9,309 2,686 2,754 1,813 182 882 992 6,880 2,610 4,270 3,794 3,794 185,940 185,940 53,878 239,773 Carbon-related assets Grand total 211,534 87,022 298,556 Total Loans & Advances & Loan Commitments 399,496 375,234 774,730 219,185 92,546 311,731 398,779 382,037 780,816 Carbon-related assets / Total Loans & Advances and Loan Commitments 53% 23% 39% 55% 24% 40% (2) % (11) % (4) % (5) % (2) % (3) % 2 % (41) % (3) % (4) % (4) % (1) % Sub-total of sectors spanning in multiple industries Oil and Gas Notes 2,256 12,402 14,658 2,750 11,913 14,663 0 % 1 The sectors have been represented based on the standard nomenclature of economic activities (NACE codes) this year. These sector headings are consistent across our disclosures on credit risk concentration by industry for contractual maturity, staging and geography (page 320). The prior year comparatives have been represented in line with the updated sector headings. 2 As industries decarbonise, sectors will increasingly include both carbon and non-carbon related activities e.g. Power Utilities will also include, in part, their generation capacity from renewable energy sources. 3 Loans & advances includes debt securities at amortised cost amounting to £56,789m (2022: £45,487m) of which carbon related assets are £2,906m (2022: £3,482m). These carbon related assets comprises £2,643m (2022: £3,406m) in Material & Buildings, £238m (2022: £74m) in Transport and storage and £25m (2022: £2m) in Energy and water. 4 Loan commitments excludes the fair value exposures of £15,203m in 2023 (2022: £13,471m). 5 Diversified miners with minority interests in thermal coal mining are included in this category. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 286 Risk performance - Climate risk (continued) Credit exposure to nature priority sectors For the first time we disclose credit exposure to sectors defined by TNFD in its Additional Guidance for Financial Institutions as “Nature priority sectors” which we note is a core TNFD metric for banks under the TNFD disclosure framework published in September 2023. As part of our efforts to calculate and disclose this metric, we have mapped the industry codes provided by TNFD to Barclays Industry classifications. The monitoring and reporting of our exposures to these TNFD identified nature priority sectors will continue to evolve in line with approaches taken to nature-related risk management and as the list of priority sectors set out in the TNFD Guidance for Financial Institutions is updated and as such, are subject to change in future. Nature-related risks within a sector may vary substantially according to company and project. Credit exposures to nature priority sectors 1, 2 2023 (£m) 2022 (£m) Loans & advances3 Loan commitments4 Total Loans & advances3 Loan commitments⁴ Total % change 3,597 962 186 2,256 948 161 372 452 3,272 80 240 242 228 221 113 43 858 262 687 75 398 119 315 278 914 5,705 748 12,402 13,049 381 3,947 641 2,247 729 886 526 500 1,705 303 145 5,691 2,349 1,263 124 417 799 6,022 562 4,511 6,667 934 14,658 13,997 542 4,319 1,093 5,519 809 1,126 768 728 1,926 416 188 6,549 2,611 1,950 199 815 918 6,337 840 1,889 654 18,908 1,699 1,565 65,319 3,588 2,219 84,227 3,762 908 168 2,750 2,481 222 474 802 3,521 103 121 239 316 201 95 40 968 465 647 95 453 309 596 360 754 464 822 6,111 642 11,913 13,318 160 4,223 752 2,126 739 1,028 490 624 314 184 5,493 2,221 1,166 87 429 683 4,584 7,019 810 14,663 15,799 382 4,697 1,554 5,647 842 (2%) (5%) 15% —% (11%) 42% (8%) (30%) (2%) (4%) 1,149 (2%) 729 940 5% (23%) (22%) 409 2% 224 (16%) 6,461 2,686 1,813 182 882 992 1% (3%) 8% 9% (8%) (7%) 2% 2,262 2,463 5,642 6,238 567 1,160 1,679 927 (9%) 1,914 2,143 87% 4% 21,314 64,835 86,149 (2%) Agriculture Food, Bev and Tobacco Paper and Forest Products Oil and Gas Power Utilities Cement Chemicals Construction & Materials Homebuilding and Property Development Manufacturing - Personal Care Products Manufacturing - Semiconductors and Semiconductor Equipments Manufacturing - Textiles, Apparel and Luxury Goods Metals 5 Mining (incl. diversified miners) Packaging manufacturers: Metal, Glass and Plastics Steel Automotive Aviation Other Transport Services Ports Road Haulage Shipping Pharmaceuticals Sewerage, Waste Collection, Treatment and Disposal Power Utilities - Renewable Water Utilities Nature Priority Sector Assets Grand Total Total Loans & Advances and Loan Commitments Nature priority sectors assets / Total loans & advances and loan commitments Notes 399,496 375,234 774,730 398,779 382,037 780,816 (1%) 5 % 17 % 11 % 5 % 17 % 11 % 1 As industries decarbonise, sectors will increasingly include both carbon and non-carbon related activities e.g. Power Utilities will also include, in part, their generation capacity from renewable energy sources. 2 The TNFD highlights real estate development as a high-priority sector for nature. Barclays has £29,919m (2022: £32,597m) of Loans & Advances and Loan Commitments to Real Estate Management and Development, of which the majority is from real estate investment activity. As a result, this has been excluded from the Priority sector assets for Nature. 3 Loans & advances includes debt securities at amortised cost amounting to £56,789m (2022: £45,487m) of which nature priority sector assets are £2,906m (2022: £3,482m). These nature priority sector assets comprises £2,643m (2022: £3,406m) in Material & Buildings, £238m (2022: £74m) in Transport and storage and £25m (2022: £2m) in Energy and water. 4 Loan commitments excludes the fair value exposures of £15,203m in 2023 (2022: £13,471m). 5 Diversified miners with minority interests in thermal coal mining are included in this category. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 287 Risk performance - Climate risk (continued) Financing To facilitate greater understanding and transparency of our capital markets financing, we disclose the total capital raised for clients across all sectors using data sourced from Dealogic. We have provided the breakdown of our 2022 and 2023 financing below. We have constructed this table based on the mapping of issuers’ industry assignment in Dealogic data and Barclays’ internal industry taxonomy called Barclays Industry Classification (BIC). Financing volumes are reported on a manager-proceeds basis including bonds, equities, loans and securitised bonds and no modifications have been made by Barclays. This data represents a third party view of our financing and is subject to Dealogic’s league table methodology, which pro-rates volume across lead-managers. We are presenting the data in this format to support transparency and comparability but it should be noted that this data is subject to further analysis and methodological enhancements, before it is included in BlueTrack™. Carbon-related sectors in wholesale credit (Dealogic Industry Classification)1, 2, 3 31.12.2023 (£m) 31.12.2022 (£m) % Change Energy & Waters Power Utilities Manufacturing Automotive Cements Chemicals Food, Bev and Tobacco Manufacturing - Others Metals Oil and Gas (refining) Packaging Manufacturers: Metal, Glass and Plastics Paper and Forest Products Steel Materials and Building Construction and Materials Homebuilding and Property Development Real Estate Management and Development Mining and Quarrying 4 Mining (Incl. diversified miners) Oil and Gas (extraction) Transport & storage Aviation Oil and Gas (midstream) Other Transport Services Road Haulage Shipping Wholesale and retail distribution and leisure Oil and Gas (wholesale) Others Other Financial Institutions Real Estate Management and Development (REITs) Carbon-related Assets Grand Total Capital Market Financing Total Financing to Carbon-related Sector / Total Capital Market Financing Sub-total of sectors spanning in multiple industries Oil and Gas Notes 20,329 20,329 31,336 7,333 279 2,523 6,991 11,743 145 1,381 217 102 622 3,143 446 457 2,240 2,992 877 2,115 7,858 1,797 3,887 997 202 975 3,005 720 2,285 1,163 1,163 69,826 27,021 27,021 24,782 3,136 162 2,241 4,310 11,443 604 1,793 27 711 355 6,668 82 617 5,969 2,527 354 2,173 7,654 1,731 2,752 2,149 — 1,022 6,227 1,193 5,034 3,178 3,178 78,057 311,054 22 % 304,249 26% (25) % 26 % (53) % 18 % 3 % (52) % (63) % (11) % 2 % 8,103 7,911 2 % 1 The sectors have been represented based on the standard nomenclature of economic activities (NACE codes) this year. These sector headings are consistent across our disclosures on credit risk concentration by industry for contractual maturity, staging and geography (page 320). The prior year comparatives have been represented in line with the updated sector headings. 2 As industries decarbonise, sectors will increasingly include both carbon and non-carbon related activities e.g. the clients present within the sector exposure reported under Power Utilities will also have part of their generation capacity from renewable energy sources, which represents a non-carbon related activity. 3 In 2022, this table was presented in USD. As it is now presented in GBP, the comparative figures have been represented. 4 Diversified miners with minority interests in thermal coal mining are included in this category. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 288 Risk performance - Climate risk (continued) Subsidence: Total Volume of stock (as % of total UK Mortgages portfolio) per risk band Flood: Total Volume of stock (as % of total UK Mortgages portfolio) per risk band Flooding in the UK is forecast to increase over time, with the potential for this increase to accelerate if greenhouse gas emissions are not reduced. The increased risk of flooding has the potential to impact the valuation of properties directly, as well as indirectly where a particular area becomes high risk and property demand falls. Remediation costs, high insurance premiums or potential lack of insurance coverage have the potential to impact affordability. Barclays works with a third-party climate data provider to support climate risk data enhancements within the UK Mortgages portfolio. This has enabled Barclays to move from postcode level to property level flood data granularity. Flood Risk bands are based on average annual loss, generated using flood hazard frequency and flood depth from tidal, surface, pluvial and fluvial flooding and accounting for the mitigating impact of flood defences where these are present. Properties in the Moderate and High Risk bands are expected to face above average insurance costs given their elevated exposure to flood risk. Those within the Very High band are considered likely to be eligible for Flood Re (a subsidised flood insurance scheme). As at 30 September 2023 Risk Band Negligible Very Low Low Moderate High Very High Missing Note Volume % 81.3 7.6 1.8 1.6 2.6 1.2 3.9 Data collected from 3rd party source based on one quarter lag. 30 September 2023 closest available dataset. Subsidence is driven by the interplay of precipitation, temperature and soil type factors, which result in volumetric changes to the soil. Increased volatility in weather conditions, as a result of climate change, contributes to the acceleration of subsidence impacts. Some areas, particularly those with high concentrations of clay soil (i.e. London), are more susceptible to subsidence. This shrink-swell impact can cause localised property level impacts, resulting in impacts to the valuation of a property, or impacts to affordability through remediation costs and high insurance premiums. Barclays works with a third-party climate data provider to support climate risk data enhancements within the UK Mortgages portfolio. This includes the ability to map subsidence risk at a property level granularity. The subsidence risk scoring is based on soil properties, in particular the extent to which the soil will shrink under hot and dry weather conditions, as well as the predicted temperature and probability of extreme rainfall. These variables are combined with subsidence claims per postcode to generate a pseudo-quantitative score, where a property in class 9 is around nine times as likely as a property in class 1 to make a subsidence claim. A small proportion of the UK Mortgage portfolio is not mapped to a subsidence risk score (c.5.2%). This is due either to a lack of data coverage (i.e. the property is not covered by underlying maps), or a lack of certainty in address matching. As at 30 September 2023 Risk Band Qualitative Risk Score No Subsidence Risk Low Moderate High Very High 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Missing Note Volume % 0.01 9.51 35.96 23.54 4.71 4.72 3.36 2.41 0 0.25 5.43 0 2.64 0 0 2.26 5.2 Data collected from 3rd party source based on one quarter lag. 30 September 2023 closest available dataset. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 289 Risk performance - Climate risk (continued) Flood: Very High & High Flood Risk Exposure per region (as % of Total Regional Exposure) The map below represents the proportion of properties within the UK Mortgages portfolio at High and Very High risk of flood per region as a percentage of the total regional exposure (excluding Kensington Mortgage Company originated properties). The flood metrics are presented on present day risk levels and are based on average annual loss, generated using flood hazard frequency and flood depth from tidal, surface, pluvial and fluvial flooding and accounting for the mitigating impact of flood defences where these are present. The mapping covers c.95% of the UK Mortgages portfolio on a total exposure basis - the remaining c.5% of properties are not currently mapped to flood risk ratings on a property level basis as a result of a lack of data coverage (i.e. the property is not covered by underlying maps), or a lack of certainty in address matching. % of Total Lending – High: 2.7% – Very High: 1.0% N. Ireland % of Total Lending: 0.9% of which: – High: 1.4% – Very High: 0.7% North West % of Total Lending: 5.8% of which: – High: 2.9% – Very High: 1.8% Wales % of Total Lending: 2.2% of which: – High: 2.4% – Very High: 0.7% West Midlands % of Total Lending: 5.0% of which: – High: 1.6% – Very High: 0.6% South West % of Total Lending: 6.3% of which: – High: 2.5% – Very High: 1.0% Scotland % of Total Lending: 3.5% of which: – High: 2.0% – Very High: 1.0% North East % of Total Lending: 1.9% of which: – High: 1.3% – Very High: 0.7% Yorks & the Humber % of Total Lending: 3.9% of which: – High: 2.4% – Very High: 1.4% East Midlands % of Total Lending: 4.3% of which: – High: 2.9% – Very High: 2.6% East of England % of Total Lending: 12.2% of which: – High: 2.6% – Very High: 0.9% London % of Total Lending: 33.2% Of which – High: 2.8% – Very High: 0.7% South East % of Total Lending: 20.8% of which: – High: 3.1% – Very High: 1.1 % Darker shades indicate higher proportion of high or very high flood risk exposure High and Very High Flood Risk are shown as % of regional exposure Note Data collected from third party source based on one quarter lag. 30 September 2023 closest available dataset. Business Banking - Dairy & Cattle Exposure The transition risk in the Business Banking portfolio is assessed via the percentage Dairy & Cattle lending of the Business Banking Agriculture portfolio. Given methane’s global warming potential the Dairy & Cattle sector is a significant contributor to the UK’s emissions footprint and is therefore susceptible to the transition risks of climate change, namely consumer preference changes and potential emissions taxation. Barclays utilises exposure data to identify what proportion of the Business Banking Agriculture portfolio consists of lending to Dairy & Cattle clients. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 290 Risk performance - Climate risk (continued) EPC: Total Volume of stock (as % of total UK Mortgages portfolio) per EPC rating The transition risk in the UK Mortgages portfolio is assessed via the distribution of EPC ratings across the portfolio. One of the levers to decarbonise the UK housing stock for the UK Government is to tighten energy efficiency requirements. It is anticipated that any tightening of minimum energy efficiency standards (MEES) will focus initially on buy-to-let properties. Buy-to-Let properties which are privately rented are currently required to have a minimum EPC rating of E. The transition risk identified has the potential to impact the valuation of properties directly, alongside impacting affordability as properties which fall under MEES may no longer be able to be rented out or the landlord may need to pay for retrofitting to be brought up to standard. EPC ratings range from A (most efficient) to G (least efficient). EPC ratings are used as the basis for assessing expected energy costs but do not give a precise picture of emission intensity. The UK Mortgages portfolio is mapped to the Government EPC Register. Properties may not feature on the Government EPC Register as some properties may have never been required to have an EPC rating (not been sold or rented out since 2007), their EPC rating may have expired (EPC ratings are valid for 10 years) or the property may be in Scotland or Northern Ireland (which use separate databases). Whilst Barclays’ proportion of ‘missing EPC ratings’ has declined year on year, the issue of missing EPC ratings is prevalent across the industry. EPC: Residential & Buy-to-let balances and volumes per EPC rating as at September 2023 EPC Rating Residential Balances (£m) Balance as % of Residential Mortgages portfolio Volume as % of Residential Mortgages portfolio Buy-to-Let Balances (£m) Balance as % of Buy-to- Let Mortgages portfolio Volume as % of Buy-to- Let Mortgages portfolio A B C D E F G Missing Total Note £m 487 22,514 24,954 41,575 17,546 4,132 780 30,528 142,516 % 0.3 15.8 17.5 29.3 12.3 2.9 0.5 21.4 100 % 0.2 14.3 16.6 26.4 10.2 2.2 0.4 29.7 100 £m 20 2,144 5,781 6,842 1,991 129 31 3,033 19,971 % 0.1 10.7 28.9 34.3 10.0 0.6 0.2 15.2 100 % 0.1 8.9 29.6 34.4 10.1 0.7 0.2 16.0 100 1 Data matching provided by 3rd party source based on one quarter lag, 30 September 2023 closest available dataset - EPC monitoring based on Sept-23 portfolio and Sept-23 Government EPC Register. If no valid EPC is mapped, the expired EPC (where available) is included as a proxy. EPC: Residential & Buy-to-let balances and volumes per EPC rating as at September 2022 EPC Rating Residential Balances (£m) Balance as % of Residential Mortgages portfolio Volume as % of Residential Mortgages portfolio Buy-to-Let Balances (£m) Balance as % of Buy-to- Let Mortgages portfolio Volume as % of Buy-to- Let Mortgages portfolio A B C D E F G Missing Total Note £m 341 18,913 21,585 38,179 17,022 4,118 746 39,458 140,362 % 0.2 13.5 15.4 27.3 12.1 2.9 0.5 28.1 100 % 0.2 12.0 14.5 24.5 9.7 2.1 0.4 36.5 100 £m 17 1966 5053 6445 2066 157 36 4716 20456 % 0.1 9.6 24.6 31.5 10.1 0.8 0.2 23.1 100 % 0.1 8.1 25.6 32.2 10.2 0.8 0.2 22.8 100 1 Data matching provided by 3rd party source based on one quarter lag, 30 September 2022 closest available dataset - EPC monitoring based on Sept-22 portfolio and Sept-22 Government EPC Register. If no valid EPC is mapped, the expired EPC (where available) is included as a proxy. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 291 Risk performance - Credit risk Credit risk Credit risk: summary of contents Credit risk represents a significant risk and mainly arises from exposure to loans and advances together with the counterparty credit risk arising from derivative contracts entered into with clients. This section outlines the expected credit loss allowances, the movements in allowances during the period, material management adjustments to model output and measurement uncertainty and sensitivity analysis. The Group reviews and monitors risk concentrations in a variety of ways. This section outlines performance against key concentration risks. Credit risk monitors exposure performance across a range of significant portfolios. The Group monitors exposures to assets where there is a heightened likelihood of default and assets where an actual default has occurred. From time to time, suspension of certain aspects of client credit agreements are agreed, generally during temporary periods of financial difficulties where the Group is confident that the client will be able to remedy the suspension. This section outlines the current exposure to assets with this treatment. Credit risk overview and summary of performance Maximum exposure and effects of netting, collateral and risk transfer Expected Credit Losses – Loans and advances at amortised cost by geography – Loans and advances at amortised cost by product – Movement in gross exposure and impairment allowance including provisions for loan commitments and financial guarantees – Stage 2 decomposition – Stage 3 decomposition Management adjustments to models for impairment Measurement uncertainty and sensitivity analysis Analysis of the concentration of credit risk Page 292 293 295 295 297 298 305 306 307 311 320 – Credit risk concentration by Industry for contractual maturity, 320 staging and geography Approach to management and representation of credit quality – Asset credit quality – Debt securities – Balance sheet credit quality – Credit exposures by internal PD grade Analysis of specific portfolios and asset types – Secured home loans – Retail Credit cards and Retail Other Forbearance – Retail forbearance programmes – Wholesale forbearance programmes 322 322 322 323 325 329 329 331 332 333 334 334 335 This section provides an analysis of credit risk on debt securities and derivatives. Analysis of debt securities Analysis of derivatives Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 292 Risk performance - Credit risk (continued) Credit risk Credit quality Charge All disclosures in this section are unaudited unless otherwise stated. Overview Credit risk represents a significant risk to the Group and mainly arises from exposure to loans and advances together with the counterparty credit risk arising from derivative contracts entered with clients. Credit risk disclosures exclude other financial assets not subject to credit risk, mainly equity securities. For off-balance sheet exposures certain contingent liabilities not subject to credit risk such as performance guarantees are excluded. Task force on Disclosure about Expected Credit Losses (DECL) Credit risk disclosures have been enhanced to include DECL III recommendations for minimum product grouping and geographical breakdown for this period and prior period comparatives have been aligned. Summary of performance in the period Gross exposure Gross loans and advances at amortised cost to customers and banks have remained broadly stable at £405bn, which includes increase in debt securities driven by Treasury investments and strategic acquisitions in Home Finance. This is offset by a reduction due to the German consumer finance business classified as assets held for sale and foreign exchange movements in Corporate & Investment Bank (CIB) and US Cards portfolio. Maximum exposure The Group’s net exposure to credit risk is broadly stable at £1,030bn (2022: £1,033bn). Overall, the extent to which the mitigation is held against its total exposure has decreased to 42% (2022: 44%) primarily due to decrease in derivative financial instruments (£46bn) and reverse repurchase agreements (£14bn), both of which are highly secured instruments. Delinquencies are broadly stable across the group with an increase observed in US cards, which was anticipated. A range of activities are in place to protect our existing defensive positioning against current macroeconomic headwinds. Credit impairment charges were £1,881m (2022: £1,220m), reflecting an increase in delinquencies in US cards, which was anticipated, and led to higher coverage in CC&P. Management Adjustments Economic uncertainty adjustments have decreased to £198m (2022: £317m). The reduction is informed by the rebuild of certain impairment models which better capture the macroeconomic outlook. Furthermore, adjustments have been reassessed to capture affordability headwinds in UK retail lending. + Refer to the Management adjustment to models for impairment section on page 307 for further details. Climate Barclays has performed a credit risk assessment of physical and transition risk due to climate change. This was delivered through a combination of a scenario approach and targeted reviews on specific portfolios identified as more susceptible to climate risk. The analysis did not result in a separately identifiable impairment charge for year end 2023 reporting. + Further detail can be found in the Financial statements section in Note 8 Credit impairment charges/(releases). Description of terminology can be found in the glossary, available at home.barclays/annualreport. Refer to credit risk management section for the details of governance, policies and procedures. + Corporate loans portfolio benefited from high-quality exposure and credit protection. + Further analysis on the credit quality of assets is presented in the approach to management and representation of credit quality section. Stage Decomposition A net decrease of £3.2bn is observed in Stage 2 gross exposure driven by an improved GDP forecast and higher repayments in Corporate loans partially offset by an increase in retail lending following resumption of more regular spend activity and higher interest rates. Stage 3 balances have increased to £7.2bn (2022: £7.1bn) driven by higher delinquencies in US cards partially offset by repayments in Business Banking. + Refer to pages 305 to 306 for further details. Scenario Economic uncertainty continues, linked to higher interest rates and ongoing inflationary pressures in major economies. For Q423, macroeconomic scenarios have been refreshed and are designed around a broad range of economic outcomes. The Downside 2 (DS2) scenario has been aligned to Barclays 2023 Internal Stress Test (IST23) which is less severe in terms of GDP deterioration, resulting in increased DS2 weights. ECL Impairment allowances on loans and advances at amortised cost including off- balance sheet has increased to £6,252m (2022:£6,175m) predominantly driven by increase in US cards partially offset by a reduction due to the German consumer finance business classified as assets held for sale. On-balance sheet coverage has remained strong and stable at 1.4%. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 293 Risk performance - Credit risk (continued) Maximum exposure and effects of netting, collateral and risk transfer The following tables present a reconciliation between the Group's maximum exposure and its net exposure to credit risk, reflecting the financial effects of risk mitigation reducing the Group's exposure. The Group mitigates the credit risk to which it is exposed through netting and set-off, collateral and risk transfer. Further detail on the Group’s policies to each of these forms of credit enhancement is presented on pages 131 to 134 of the Barclays PLC Pillar 3 Report 2023 (unaudited). Collateral obtained Where collateral has been obtained in the event of default, the Group does not, ordinarily, use such assets for its own operations and they are usually sold on a timely basis. The carrying value of assets held by the Group as at 31 December 2023, as a result of the enforcement of collateral, was £6m (2022: £31m). Maximum exposure and effects of netting, collateral and risk transfer (audited) Maximum exposure Netting and set-off Cash collateral Non-cash collateral Risk transfer Exposure net of risk mitigation As at 31 December 2023 On-balance sheet: Cash and balances at central banks Cash collateral and settlement balances Loans and advances at amortised cost: Retail mortgages Retail credit cards Retail other Corporate loans Total loans and advances at amortised cost Of which credit-impaired (Stage 3): Retail mortgages Retail credit cards Retail other Corporate loans Total credit-impaired loans and advances at amortised cost Debt securities at amortised cost Reverse repurchase agreements and other similar secured lending Trading portfolio assets: Debt securities Traded loans Total trading portfolio assets Financial assets at fair value through the income statement: Loans and advances Debt securities Reverse repurchase agreements Other financial assets Total financial assets at fair value through the income statement Derivative financial instruments Financial assets at fair value through other comprehensive income Other assets Assets held for sale Total on-balance sheet Off-balance sheet: Contingent liabilities Loan commitments Total off-balance sheet Total £m — — £m — — £m £m — — 224,634 108,889 (13) (171,484) — — (2,329) (1,028) (1,117) (61,892) (2,158) (235,705) — — (39) (14,716) (14,755) — — (23) (4) (27) — — — — — (1,994) — (263) (1,098) (3,355) (956) (2,594) (521) (189) (710) — — — (546) (546) (156) — — — — 15 34,221 6,556 45,461 86,253 2 387 31 308 728 55,637 — 74,977 12,464 87,441 (47) — (41,334) (221) (3,416) (145,292) — — (31,211) (3,463) (186,847) (10,036) (362) — — — (1) — (4) — — — (4) (3,791) (198) — — 6,254 2,365 423 110 9,152 12,989 71,270 2,196 3,855 (18,904) 662,316 £m 224,634 108,889 171,512 34,221 9,952 127,062 342,747 £m — — — — — (3,876) (3,876) — — — — — — — — — — — — — — — (198,809) — — — 1,996 387 317 1,956 4,656 56,749 2,594 75,498 12,653 88,151 47,639 2,586 149,131 110 199,466 256,836 71,830 2,197 3,855 1,357,948 25,340 390,437 415,777 (202,685) (36,833) (437,210) — — — (2,225) (358) (283) 22,474 (1,506) (41,862) (1,773) 345,296 (3,731) (42,220) (2,056) 367,770 1,773,725 (202,685) (40,564) (479,430) (20,960) 1,030,086 Off-balance sheet exposures are shown gross of provisions of £504m (2022: £583m). See Note 24 for further details. In addition to the above, the Group holds forward starting reverse repos with notional contract amounts of £54.3bn (2022: £48.4bn). These balances are fully collateralised. Corporate loans at amortised cost include £5.3bn (2022: £8bn) of BBLS, CBILS and CLBILS supported by UK government guarantees of £5.1bn (2022: £7.6bn), which are included within the Risk transfer column in the table. For further information on credit risk mitigation techniques, refer to the Credit risk management section. Loan commitments reported also include exposures relating to financial assets classified as assets held for sale. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 294 Risk performance - Credit risk (continued) Maximum exposure and effects of netting, collateral and risk transfer (audited) As at 31 December 2022 On-balance sheet: Cash and balances at central banks Cash collateral and settlement balances Loans and advances at amortised cost: Retail mortgages Retail credit cards Retail other Corporate loans Total loans and advances at amortised cost Of which credit-impaired (Stage 3): Retail mortgages Retail credit cards Retail other Corporate loans Total credit-impaired loans and advances at amortised cost Debt securities at amortised cost Reverse repurchase agreements and other similar secured lending Trading portfolio assets: Debt securities Traded loans Total trading portfolio assets Financial assets at fair value through the income statement: Loans and advances Debt securities Reverse repurchase agreements Other financial assets Total financial assets at fair value through the income statement Derivative financial instruments Financial assets at fair value through other comprehensive income Other assets Assets held for sale Total on-balance sheet Off-balance sheet: Contingent liabilities Loan commitments Total off-balance sheet Total Maximum exposure Netting and set-off Cash collateral Non-cash collateral Risk transfer Exposure net of risk mitigation £m 256,351 112,597 173,770 34,584 15,084 129,854 353,292 2,000 425 412 2,030 4,867 45,487 776 55,475 13,198 68,673 39,429 3,249 164,681 118 207,477 £m — — — — — £m — — £m — — £m £m — 256,351 — 112,597 (328) (173,308) (98) 36 — — — 34,584 (1,208) (4,184) (224) 9,468 (4,442) (672) (60,617) (17,190) 46,933 (4,442) (2,208) (238,109) (17,512) 91,021 — — — — — — — — — — — — — — — (1) (1,996) — (32) (6) — (323) (742) (39) (3,061) — — — — — (695) (776) (530) (250) (780) — — (3) (709) (712) 3 425 54 573 1,055 (196) 44,596 — — — (48) (48) 54,945 12,900 67,845 (17) (31,544) (9) — (321) (3,672) (160,347) — — — — — 7,859 2,928 662 118 (3,689) (192,212) (9) 11,567 302,380 (238,337) (34,547) (11,434) (7,275) 10,787 65,054 1,656 — — — — — — — (222) (711) 64,121 — — — — 1,656 — 1,413,743 (242,779) (40,444) (444,228) (25,751) 660,541 24,205 395,508 419,713 — — — (1,295) (1,596) (280) 21,034 (129) (41,917) (1,666) 351,796 (1,424) (43,513) (1,946) 372,830 1,833,456 (242,779) (41,868) (487,741) (27,697) 1,033,371 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 295 Risk performance - Credit risk (continued) Expected Credit Losses Loans and advances at amortised cost by geography Total loans and advances at amortised cost in the credit risk performance section includes loans and advances at amortised cost to banks and loans and advances at amortised cost to customers. The table below presents a product and geographical breakdown by stages of loans and advances at amortised cost. Also included are stage allocation of debt securities and off-balance sheet loan commitments and financial guarantee contracts by gross exposure, impairment allowance and coverage ratio as at 31 December 2023. Impairment allowance under IFRS 9 considers both the drawn and the undrawn counterparty exposure. For retail portfolios, the total impairment allowance is allocated to gross loans and advances to the extent allowance does not exceed the drawn exposure and any excess is reported on the liabilities side of the balance sheet as a provision. For corporate portfolios, impairment allowance on undrawn exposure is reported on the liability side of the balance sheet as a provision. Loans and advances at amortised cost by geography (audited) As at 31 December 2023 Retail mortgages Retail credit cards Retail other 1 Corporate loans Total UK Retail mortgages Retail credit cards Retail other Corporate loans Total Rest of the world Total loans and advances at amortised cost Debt securities at amortised cost Total loans and advances at amortised cost including debt securities Off-balance sheet loan commitments and 2 financial guarantee contracts Total3,4 Gross exposure Impairment allowance Stage 1 Stage 2 £m 146,001 8,094 6,832 54,257 215,184 4,201 22,315 1,637 58,248 86,401 301,585 52,869 £m 19,123 2,128 1,252 8,673 31,176 346 3,450 91 4,629 8,516 39,692 3,907 Stage 3 £m 1,812 198 264 1,692 3,966 612 1,522 229 862 3,225 7,191 — Total Stage 1 Stage 2 £m 166,936 10,420 8,348 64,622 250,326 5,159 27,287 1,957 63,739 98,142 348,468 56,776 £m 43 111 56 191 401 7 412 3 96 518 919 11 £m 77 492 117 214 900 28 1,138 1 200 1,367 2,267 16 Stage 3 £m 112 107 144 346 709 316 1,226 32 252 1,826 2,535 — Total £m 232 710 317 751 2,010 351 2,776 36 548 3,711 5,721 27 354,454 43,599 7,191 405,244 930 2,283 2,535 5,748 374,063 728,517 24,208 67,807 1,037 399,308 8,228 804,552 173 1,103 287 2,570 44 2,579 504 6,252 As at 31 December 2023 Retail mortgages Retail credit cards Retail other 1 Corporate loans Total UK Retail mortgages Retail credit cards Retail other Corporate loans Total Rest of the world Total loans and advances at amortised cost Debt securities at amortised cost Total loans and advances at amortised cost including debt securities Off-balance sheet loan commitments and 2 financial guarantee contracts Total3, 4 Notes Net Exposure Coverage ratio Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 £m 145,958 7,983 6,776 54,066 214,783 4,194 21,903 1,634 58,152 85,883 300,666 52,858 £m 19,046 1,636 1,135 8,459 30,276 318 2,312 90 4,429 7,149 37,425 3,891 £m 1,700 91 120 1,346 3,257 296 296 197 610 1,399 4,656 — £m 166,704 9,710 8,031 63,871 248,316 4,808 24,511 1,921 63,191 94,431 342,747 56,749 353,524 41,316 4,656 399,496 373,890 727,414 23,921 65,237 993 398,804 5,649 798,300 % — 1.4 0.8 0.4 0.2 0.2 1.8 0.2 0.2 0.6 0.3 — 0.3 — 0.2 % 0.4 23.1 9.3 2.5 2.9 8.1 33.0 1.1 4.3 16.1 5.7 0.4 5.2 1.2 3.8 % 6.2 54.0 54.5 20.4 17.9 51.6 80.6 14.0 29.2 56.6 35.3 — 35.3 4.2 31.3 Total % 0.1 6.8 3.8 1.2 0.8 6.8 10.2 1.8 0.9 3.8 1.6 — 1.4 0.1 0.8 1 Includes Business Banking, which has a gross exposure of £15.2bn and an impairment allowance of £431m. This comprises £99m impairment allowance on £9.8bn Stage 1 exposure, £81m on £4.1bn Stage 2 exposure and £251m on £1.3bn Stage 3 exposure. Excluding this, total coverage for corporate loans in UK is 0.6%. 2 Excludes loan commitments and financial guarantees of £16.5bn carried at fair value and includes exposures relating to financial assets classified as assets held for sale. 3 Other financial assets subject to impairment not included in the table above include cash collateral and settlement balances, financial assets at fair value through other comprehensive income and other assets. These have a total gross exposure of £183.6bn and impairment allowance of £151m. This comprises £16m ECL on £182.8bn Stage 1 exposure, £2m on £0.6bn Stage 2 exposure and £133m on £140m Stage 3 exposure. 4 The annualised loan loss rate is 46bps after applying the total impairment charge of £1,881m. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 296 Risk performance - Credit risk (continued) Assets held for sale During 2023, gross loans and advances and related impairment allowances for the German consumer finance business were reclassified from loans and advances to customers to assets held for sale in the balance sheet. Disclosures relating to assets held for sale are provided in the credit risk tables, primarily where the disclosure is relevant to the measurement of these financial assets. For further details on assets held for sale, see Note 40 to the financial statements. Loans and advances to customers classified as assets held for sale As at 31 December 20231 Retail credit cards Retail other Total Rest of the World Note Stage 1 Stage 2 Stage 3 Total Gross £m 1,621 1,561 3,182 ECL Coverage Gross ECL Coverage Gross ECL Coverage Gross ECL Coverage £m 15 20 35 % 0.9 1.3 1.1 £m 445 288 733 £m 41 32 73 % 9.2 11.1 10.0 £m 92 84 £m 68 60 % £m 73.9 2,158 71.4 1,933 176 128 72.7 4,091 £m 124 112 236 % 5.7 5.8 5.8 1 In 2022, total gross exposure of £4.3bn and impairment allowance of £296m was included in loans and advances at amortised cost which has now been classified as assets held for sale. This comprises £37m ECL on £3.1bn Stage 1 exposure, £141m on £1.0bn Stage 2 exposure and £118m on £153m Stage 3 exposure. Loans and advances at amortised cost by geography (audited) As at 31 December 2022 Retail mortgages Retail credit cards Retail other 1 Corporate loans Total UK Retail mortgages Retail credit cards Retail other Corporate loans Total Rest of the World Total loans and advances at amortised cost Debt securities at amortised cost Total loans and advances at amortised cost including debt securities Off-balance sheet loan commitments and 2 financial guarantee contracts Total3,4 As at 31 December 2022 Retail mortgages Retail credit cards Retail other 1 Corporate loans Total UK Retail mortgages Retail credit cards Retail other Corporate loans Total Rest of the World Total loans and advances at amortised cost Total loans and advances at amortised cost Debt securities at amortised cost including debt securities Off-balance sheet loan commitments and 2 financial guarantee contracts Total3, 4 Notes Gross exposure Impairment allowance Stage 1 Stage 2 Stage 3 £m £m £m Total £m 145,821 7,119 8,202 55,187 216,329 7,851 22,669 5,268 56,704 92,492 308,821 41,724 17,735 2,569 1,197 12,528 34,029 465 3,880 271 4,290 8,906 42,935 3,805 1,481 251 293 2,008 4,033 933 1,129 427 564 3,053 7,086 165,037 9,939 9,692 69,723 254,391 9,249 27,678 5,966 61,558 104,451 358,842 — 45,529 Stage 1 Stage 2 Stage 3 £m 21 127 72 317 537 8 331 28 144 511 1,048 9 £m 49 493 138 264 944 24 1,127 28 160 1,339 2,283 33 £m 58 137 145 360 700 356 818 163 182 1,519 2,219 0 Total £m 128 757 355 941 2,181 388 2,276 219 486 3,369 5,550 42 350,545 46,740 7,086 404,371 1,057 2,316 2,219 5,592 372,945 723,490 30,694 77,434 1,180 8,266 404,819 809,190 245 1,302 315 2,631 23 2,242 583 6,175 Net Exposure Coverage ratio Stage 1 Stage 2 Stage 3 £m £m £m Total £m 145,800 6,992 8,130 54,870 215,792 7,843 22,338 5,240 56,560 91,981 307,773 41,715 349,488 372,700 722,188 17,686 2,076 1,059 12,264 33,085 441 2,753 243 4,130 7,567 40,652 3,772 44,424 30,379 74,803 1,423 114 148 1,648 3,333 577 311 264 382 1,534 4,867 — 4,867 164,909 9,182 9,337 68,782 252,210 8,861 25,402 5,747 61,072 101,082 353,292 45,487 398,779 1,157 6,024 404,236 803,015 Stage 1 Stage 2 Stage 3 Total % — 1.8 0.9 0.6 0.2 0.1 1.5 0.5 0.3 0.6 0.3 — 0.3 0.1 0.2 % 0.3 19.2 11.5 2.1 2.8 5.2 29.0 10.3 3.7 15.0 5.3 0.9 5.0 1.0 3.4 % 3.9 54.6 49.5 17.9 17.4 38.2 72.5 38.2 32.3 49.8 31.3 — 31.3 1.9 27.1 % 0.1 7.6 3.7 1.3 0.9 4.2 8.2 3.7 0.8 3.2 1.5 0.1 1.4 0.1 0.8 1 Includes Business Banking, which has a gross exposure of £18.1bn and an impairment allowance of £519m. This comprises £149m impairment allowance on £10.5bn Stage 1 exposure, £121m on £6.0bn Stage 2 exposure and £249m on £1.6bn Stage 3 exposure. Excluding this, total coverage for corporate loans in UK is 0.8%. 2 Excludes loan commitments and financial guarantees of £14.9bn carried at fair value. 3 Other financial assets subject to impairment not included in the table above include cash collateral and settlement balances, financial assets at fair value through other comprehensive income and other assets. These have a total gross exposure of £180.1bn and impairment allowance of £163m. This comprises £10m ECL on £178.4bn Stage 1 exposure, £9m on £1.5bn Stage 2 exposure and £144m on £149m Stage 3 exposure. 4 The annualised loan loss rate is 30bps after applying the total impairment charge of £1,220m. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 297 Risk performance - Credit risk (continued) Loans and advances at amortised cost by product (audited) The table below presents a product breakdown by stages of loans and advances at amortised cost. Also included is a breakdown of Stage 2 past due balances. Loans and advances at amortised cost by product (audited) As at 31 December 2023 Gross exposure Retail mortgages Retail credit cards Retail other Corporate loans Total Impairment allowance Retail mortgages Retail credit cards Retail other Corporate loans Total Net exposure Retail mortgages Retail credit cards Retail other Corporate loans Total Coverage ratio Retail mortgages Retail credit cards Retail other Corporate loans Total As at 31 December 2022 Gross exposure Retail mortgages Retail credit cards Retail other Corporate loans Total Impairment allowance Retail mortgages Retail credit cards Retail other Corporate loans Total Net exposure Retail mortgages Retail credit cards Retail other Corporate loans Total Coverage ratio Retail mortgages Retail credit cards Retail other Corporate loans Total Stage 1 Not past due Stage 2 <=30 days past due >30 days past due Total Stage 3 Total £m 150,202 30,409 8,469 112,505 301,585 50 523 59 287 919 150,152 29,886 8,410 112,218 300,666 % — 1.7 0.7 0.3 0.3 £m 16,834 4,858 1,094 12,960 35,746 73 1,257 82 399 1,811 16,761 3,601 1,012 12,561 33,935 % 0.4 25.9 7.5 3.1 5.1 £m 1,971 392 126 179 2,668 20 166 18 8 212 1,951 226 108 171 2,456 % 1.0 42.3 14.3 4.5 7.9 £m 664 328 123 163 1,278 12 207 18 7 244 652 121 105 156 1,034 % 1.8 63.1 14.6 4.3 19.1 £m 19,469 5,578 1,343 13,302 39,692 105 1,630 118 414 2,267 19,364 3,948 1,225 12,888 37,425 % 0.5 29.2 8.8 3.1 5.7 £m 2,424 1,720 493 2,554 7,191 £m 172,095 37,707 10,305 128,361 348,468 428 1,333 176 598 2,535 583 3,486 353 1,299 5,721 1,996 387 317 1,956 4,656 171,512 34,221 9,952 127,062 342,747 % 17.7 77.5 35.7 23.4 35.3 % 0.3 9.2 3.4 1.0 1.6 £m £m £m £m £m £m £m 153,672 29,788 13,470 111,891 308,821 29 458 100 461 1,048 153,643 29,330 13,370 111,430 307,773 % — 1.5 0.7 0.4 0.3 15,990 5,731 1,232 16,552 39,505 53 1,334 118 401 1,906 15,937 4,397 1,114 16,151 37,599 % 0.3 23.3 9.6 2.4 4.8 1,684 284 104 159 2,231 11 100 22 13 146 1,673 184 82 146 2,085 % 0.7 35.2 21.2 8.2 6.5 526 434 132 107 1,199 9 186 26 10 231 517 248 106 97 968 % 1.7 42.9 19.7 9.3 19.3 18,200 6,449 1,468 16,818 42,935 73 1,620 166 424 2,283 18,127 4,829 1,302 16,394 40,652 % 0.4 25.1 11.3 2.5 5.3 2,414 1,380 720 2,572 7,086 174,286 37,617 15,658 131,281 358,842 414 955 308 542 2,219 516 3,033 574 1,427 5,550 2,000 425 412 2,030 4,867 173,770 34,584 15,084 129,854 353,292 % 17.1 69.2 42.8 21.1 31.3 % 0.3 8.1 3.7 1.1 1.5 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 298 Risk performance - Credit risk (continued) Movement in gross exposures and impairment allowance including provisions for loan commitments and financial guarantees The following tables present a reconciliation of the opening to the closing balance of the exposure and impairment allowance. Transfers between stages in the tables have been reflected as if they had taken place at the beginning of the year. 'Net drawdowns, repayments, net-remeasurement and movements due to exposure and risk parameter changes' includes additional drawdowns and partial repayments from existing facilities. Additionally, the below tables do not include other financial assets subject to impairment such as debt securities at amortised cost, cash collateral and settlement balances, financial assets at fair value through other comprehensive income and other assets. The movements are measured over a 12-month period. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 299 Risk performance - Credit risk (continued) Loans and advances at amortised cost (audited) Retail mortgages As at 1 January 2023 Transfers from Stage 1 to Stage 2 Transfers from Stage 2 to Stage 1 Transfers to Stage 3 Transfers from Stage 3 1 Business activity in the year Refinements to models used for calculation Net drawdowns, repayments, net re-measurement and movements due to exposure and risk parameter changes Final repayments 2 Disposals Write-offs As at 31 December 2023 Retail credit cards As at 1 January 2023 Transfers from Stage 1 to Stage 2 Transfers from Stage 2 to Stage 1 Transfers to Stage 3 Transfers from Stage 3 Business activity in the year 3 Refinements to models used for calculation Net drawdowns, repayments, net re-measurement and movements due to exposure and risk parameter changes Final repayments 4 Transfers to assets held for sale 2 Disposals Write-offs As at 31 December 2023 Retail other As at 1 January 2023 Transfers from Stage 1 to Stage 2 Transfers from Stage 2 to Stage 1 Transfers to Stage 3 Transfers from Stage 3 Business activity in the year Refinements to models used for calculation Net drawdowns, repayments, net re-measurement and movements due to exposure and risk parameter changes Final repayments 4 Transfers to assets held for sale 2 Disposals Write-offs As at 31 December 2023 Notes Stage 1 Stage 2 Stage 3 Total Gross exposure £m ECL £m Gross exposure £m 153,672 (9,557) 6,052 (453) 26 23,329 — 29 (2) 22 — 1 13 — 18,200 9,557 (6,052) (530) 122 978 — ECL £m 73 2 (22) (13) 2 7 — Gross exposure £m ECL £m Gross exposure £m 2,414 — — 983 (148) 26 — 414 — — 13 (3) 11 — 174,286 — — — — 24,333 — ECL £m 516 — — — — 31 — (11,505) (8) (1,136) 65 (502) 27 (13,143) 84 (10,837) (525) — 150,202 29,788 (2,406) 2,900 (678) 54 2,775 — (3) (2) — 50 (1,666) (4) — 19,469 (9) — — 105 (328) (2) (19) 2,424 (15) — (19) 428 (12,831) (531) (19) 172,095 458 (68) 590 (27) 32 60 (28) 6,449 2,406 (2,900) (874) 31 332 — 1,620 68 (590) (374) 18 116 37 1,380 — — 1,552 (85) 29 — 955 — — 401 (50) 25 11 37,617 — — — — 3,136 — (27) (2) (19) 583 3,033 — — — — 201 20 (162) (465) 649 797 (47) 998 440 1,330 (241) (1,621) — — 30,409 13,470 (1,179) 463 (549) 33 7,302 — (14) (15) — — 523 100 (13) 36 (4) 3 27 — (70) (445) — — 5,578 1,468 1,179 (463) (154) 9 197 — (21) (41) — — 1,630 (26) (92) (186) (805) (19) (68) (115) (805) (337) (2,158) (186) (805) 1,720 1,333 37,707 (54) (124) (115) (805) 3,486 166 13 (36) (44) 4 23 — 720 — — 703 (42) 28 — 308 — — 48 (7) 21 — 15,658 — — — — 7,527 — 574 — — — — 71 — (4,163) (57) (247) 31 (146) 115 (4,556) 89 (5,347) (1,561) — — 8,469 (13) (20) — — 59 (358) (288) — — 1,343 (7) (32) — — 118 (421) (84) (134) (131) 493 (44) (60) (74) (131) 176 (6,126) (1,933) (134) (131) 10,305 (64) (112) (74) (131) 353 1 Business activity in the year reported within Retail mortgages includes an acquisition of Kensington Mortgage Company in UK Mortgages of £2.4bn. 2 The £531m of disposals reported within Retail mortgages relate to transfer of facilities to a non-consolidated special purpose vehicle for the purpose of securitisation. The £186m of disposals reported within Retail credit cards include debt sales undertaken during the year. The £134m of disposals reported within Retail other include £64m part sale of Wealth portfolio in Italy and £70m of debt sales undertaken during the year. 3 Refinements to models used for calculation reported within Retail credit cards include a £88m movement in UK Cards, £43m movement in US Cards and £(111)m movement in the German consumer finance business. These reflect model enhancements made during the year. Barclays continually reviews the output of models to determine accuracy of the ECL calculation including review of model monitoring, external benchmarking and experience of model operation over an extended period of time. This helps to ensure that the models used continue to reflect the risks inherent across the businesses. 4 Transfers to assets held for sale reported within Retail credit cards and Retail other relate to the German consumer finance business. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 300 Risk performance - Credit risk (continued) Loans and advances at amortised cost (audited) Corporate loans As at 1 January 2023 Transfers from Stage 1 to Stage 2 Transfers from Stage 2 to Stage 1 Transfers to Stage 3 Transfers from Stage 3 Business activity in the year 1 Refinements to models used for calculation Net drawdowns, repayments, net re-measurement and movements due to exposure and risk parameter 2 changes Final repayments 3 Disposals Write-offs As at 31 December 2023 Stage 1 Stage 2 Stage 3 Total Gross exposure £m ECL £m Gross exposure £m ECL £m Gross exposure £m ECL £m Gross exposure £m 111,891 (6,172) 5,592 (758) 195 23,213 — 461 (45) 108 (10) 16 43 (61) 16,818 6,172 (5,592) (1,011) 403 933 — 424 45 (108) (27) 22 29 174 2,572 — — 1,769 (598) 205 — 542 — — 37 (38) 29 — 131,281 — — — — 24,351 — ECL £m 1,427 — — — — 101 113 2,079 (179) (1,618) (73) (667) 405 (206) 153 (23,149) (386) — 112,505 (43) (3) — 287 (2,689) (114) — 13,302 (46) (26) — 414 (406) (108) (213) 2,554 (65) (99) (213) 598 (26,244) (608) (213) 128,361 Reconciliation of ECL movement to credit impairment charge/(release) for the period Stage 1 Stage 2 Stage 3 Retail mortgages Retail credit cards Retail other Corporate loans ECL movements excluding assets held for sale, disposals and write-offs4 ECL movement on loan commitments and other financial guarantees ECL movement on other financial assets ECL movement on debt securities at amortised cost 5 Recoveries and reimbursements Total exchange and other adjustments Total credit impairment charge for the year Notes £m 23 80 (21) (171) (89) (72) 6 2 4 £m 32 51 (16) 16 83 (28) (7) (17) (4) 1 Refinements to models used for calculation reported within Corporate loans include a £93m movement in Corporate and Investment Bank and £20m movement in Barclaycard Payments. These reflect model enhancements made during the year. Barclays continually reviews the output of models to determine accuracy of the ECL calculation including review of model monitoring, external benchmarking and experience of model operation over an extended period of time. This helps to ensure that the models used continue to reflect the risks inherent across the businesses. 2 'Net drawdowns, repayments, net re-measurement and movements due to exposure and risk parameter changes' reported within Corporate loans also include assets of £0.8bn derecognised due to payment received on defaulted loans from government guarantees issued under government’s Bounce Back Loans Scheme. 3 The £608m of disposals reported within Corporate loans relate to debt sales undertaken during the year. 4 In 2023, gross write-offs amounted to £1,168m (2022: £1,620m) and post write-off recoveries amounted to £44m (2022: £64m). Net write-offs represent gross write-offs less post write-off recoveries and amounted to £1,124m (2022: £1,556m). 5 Recoveries and reimbursements include £29m for reimbursements expected to be received under the arrangement where Group has entered into financial guarantee contracts which provide credit protection over certain assets with third parties and cash recoveries of previously written off amounts of £44m. (154) (128) (213) 1,299 Total £m 88 £m 33 1,366 1,497 133 368 96 213 1,900 1,894 21 (11) — (73) (79) (12) (15) (73) 166 1,881 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 301 Risk performance - Credit risk (continued) Loan commitments and financial guarantees (audited) Stage 1 Stage 2 Stage 3 Total Retail mortgages As at 1 January 2023 Net transfers between stages Business activity in the year Net drawdowns, repayments, net re- measurement and movement due to exposure and risk parameter changes Limit management and final repayments As at 31 December 2023 Retail credit cards1 As at 1 January 2023 Net transfers between stages Business activity in the year Gross exposure £m 11,714 (62) 4,184 (7,669) (391) 7,776 144,957 448 19,098 ECL £m — — — — — — 50 61 16 Gross exposure £m 450 53 — (11) (44) 448 5,435 (538) 224 Net drawdowns, repayments, net re- measurement and movement due to exposure and risk parameter changes Limit management and final repayments As at 31 December 2023 (5,863) (59) (1,769) (13,849) 144,791 (9) 59 (545) 2,807 Retail other1 As at 1 January 2023 Net transfers between stages Business activity in the year Net drawdowns, repayments, net re- measurement and movement due to exposure and risk parameter changes Limit management and final repayments As at 31 December 2023 Corporate loans As at 1 January 2023 Net transfers between stages Business activity in the year Net drawdowns, repayments, net re- measurement and movement due to exposure and risk parameter changes Limit management and final repayments As at 31 December 2023 Note 10,427 (171) 1,639 (1,690) (1,598) 8,607 5 — — 1 — 6 520 140 1 (93) (33) 535 205,847 190 24,289 2,416 54,807 23 27 (2,423) 2,271 3,556 (106) 97 ECL £m — — — — — — 83 (61) 13 53 (34) 54 — — — 2 — 2 232 (23) 43 25 Gross exposure £m 6 9 — (11) — 4 228 90 1 (101) (76) 142 80 31 4 (59) (12) 44 866 7 39 206 ECL £m — — — — — — Gross exposure £m 12,170 — 4,184 (7,691) (435) 8,228 — 150,620 — 19,323 — — — — — — — — — 11,027 — 1,644 (1,842) (1,643) 9,186 23 231,002 — 57,117 — 2 24 ECL £m — — — — — — 133 — 29 5 — — 3 — 8 445 — 72 (7,733) (6) — (14,470) — 147,740 (43) 113 (53,737) (26) (3,816) (46) (271) (5) (57,824) 212,889 108 20,418 231 847 44 234,154 (77) 383 3,859 (57) 1 Loan commitments reported within Retail credit cards and Retail other also include financial assets classified as held for sale. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 302 Risk performance - Credit risk (continued) Loans and advances at amortised cost (audited) Retail mortgages As at 1 January 2022 Transfers from Stage 1 to Stage 2 Transfers from Stage 2 to Stage 1 Transfers to Stage 3 Transfers from Stage 3 Business activity in the year Refinements to models used for calculation Net drawdowns, repayments, net re- measurement and movements due to exposure and risk parameter changes Final repayments Disposals Write-offs As at 31 December 2022 Retail credit cards As at 1 January 2022 Transfers from Stage 1 to Stage 2 Transfers from Stage 2 to Stage 1 Transfers to Stage 3 Transfers from Stage 3 Business activity in the year 1 Refinements to models used for calculation Net drawdowns, repayments, net re- measurement and movements due to exposure and risk parameter changes Final repayments 2 Disposals Write-offs As at 31 December 2022 Retail other As at 1 January 2022 Transfers from Stage 1 to Stage 2 Transfers from Stage 2 to Stage 1 Transfers to Stage 3 Transfers from Stage 3 Business activity in the year 1 Refinements to models used for calculation Net drawdowns, repayments, net re- measurement and movements due to exposure and risk parameter changes Final repayments 2 Disposals Write-offs As at 31 December 2022 Notes Stage 1 Stage 2 Stage 3 Total Gross exposure £m ECL £m Gross exposure £m ECL £m Gross exposure £m ECL £m Gross exposure £m 148,058 (8,747) 7,489 (400) 32 30,028 — 19 (1) 24 — 1 10 — 19,500 8,747 (7,489) (725) 229 1,142 — 59 1 (24) (6) 4 7 — 2,122 — — 1,125 (261) 6 — 397 — — 6 (5) — — 169,680 — — — — 31,176 — ECL £m 475 — — — — 17 — (8,846) (22) (1,081) 36 (125) 52 (10,052) 66 (13,942) — — 153,672 (2) — — 29 (2,123) — — 18,200 23,654 (2,661) 1,554 (416) 44 5,060 — 698 (67) 445 (16) 26 120 82 4,287 2,661 (1,554) (542) 9 389 — (4) — — 73 1,526 67 (445) (260) 4 128 (50) (426) — (27) 2,414 1,551 — — 958 (53) 122 — (9) — (27) 414 (16,491) — (27) 174,286 1,092 — — 276 (30) 97 96 29,492 — — — — 5,571 — (15) — (27) 516 3,316 — — — — 345 128 2,973 (801) 1,296 685 59 579 4,328 463 (261) (159) — 29,788 13,413 (734) 367 (224) 43 6,190 — (25) (4) — 458 106 (10) 39 (4) 7 50 — (68) (29) — 6,449 1,288 734 (367) (155) 16 370 — (24) (11) — 1,620 (34) (219) (1,004) 1,380 (18) (133) (1,004) 955 (363) (407) (1,004) 37,617 (67) (148) (1,004) 3,033 154 10 (39) (43) 9 54 — 774 — — 379 (59) 34 — 406 — — 47 (16) 28 — 15,475 — — — — 6,594 — 666 — — — — 132 — (1,853) (77) (146) 28 97 176 (1,902) 127 (3,732) — — 13,470 (11) — — 100 (272) — — 1,468 (7) — — 166 (194) (56) (255) 720 (42) (36) (255) 308 (4,198) (56) (255) 15,658 (60) (36) (255) 574 1 Refinements to models used for calculation reported within Retail credit cards include a £0.3bn movement in US Cards and £(0.2)bn in UK Cards. These reflect model enhancements made during the year. Barclays continually reviews the output of models to determine accuracy of the ECL calculation including review of model monitoring, external benchmarking and experience of model operation over an extended period of time. This helps to ensure that the models used continue to reflect the risks inherent across the businesses. 2 The £0.4bn of disposals reported within Retail credit cards include a £0.2bn sale of NFL portfolio within US Cards and £0.2bn of debt sales undertaken during the year. The £0.1bn disposals reported within Retail other include debt sales undertaken during the year. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 303 Risk performance - Credit risk (continued) Loans and advances at amortised cost (audited) Corporate loans As at 1 January 2022 Transfers from Stage 1 to Stage 2 Transfers from Stage 2 to Stage 1 Transfers to Stage 3 Transfers from Stage 3 Business activity in the year 1 Refinements to models used for calculation Net drawdowns, repayments, net re- measurement and movements due to exposure 2 and risk parameter changes Final repayments 3 Disposals Write-offs As at 31 December 2022 Gross exposure £m ECL £m Gross exposure £m ECL £m Gross exposure £m ECL £m Gross exposure £m 102,337 (7,662) 5,278 (1,489) 204 24,187 — 377 (68) 60 (6) 21 86 (60) 15,609 7,662 (5,278) (694) 339 2,655 — 270 68 (60) (15) 28 79 (61) 2,756 — — 2,183 (543) 239 — 625 — — 21 (49) 31 (374) 120,702 — — — — 27,081 — ECL £m 1,272 — — — — 196 (495) 11,023 91 303 163 (1,449) 725 9,877 979 (21,987) — — 111,891 (40) — — 461 (3,747) (31) — 16,818 (48) — — 424 (231) (49) (334) 2,572 (56) (47) (334) 542 (25,965) (80) (334) 131,281 Reconciliation of ECL movement to credit impairment charge/(release) for the period Stage 1 Stage 2 Stage 3 Retail mortgages Retail credit cards Retail other Corporate loans ECL movement derecognised due to disposals and write-offs4 ECL movement on loan commitments and financial guarantees ECL movement on other financial assets ECL movement on debt securities at amortised cost 5 Recoveries and reimbursements Total exchange and other adjustments Total credit impairment charge for the year Notes £m 10 (236) (6) 84 (148) 28 4 3 £m 14 105 12 154 285 13 8 27 (122) (63) 1 Refinements to model used for calculation reported within Corporate loans include a £(0.5)bn movement in Business Banking. These reflect model enhancements made during the year. Barclays continually review the output of models to determine accuracy of the ECL calculation including review of model monitoring, external benchmarking and experience of model operation over an extended period of time. This ensures that the models used continue to reflect the risks inherent across the businesses. 2 'Net drawdowns, repayments, net re-measurement and movements due to exposure and risk parameter changes' reported within Corporate loans also include assets of £1.3bn derecognised due to payment received on defaulted loans from government guarantees issued under government’s Bounce Back Loans Scheme. 3 The £80m of disposals reported within Corporate loans relate to debt sales undertaken during the year. 4 In 2022, gross write-offs amounted to £1,620m. In Q422, £329m of balances with de minimis recovery expectations were written-off in line with policy in UK Cards and Unsecured Loans. Post write-off recoveries amounted to £64m. Net write-offs represent gross write-offs less post write-off recoveries and amounted to £1,556m. 5 Recoveries and reimbursements include £199m for reimbursements expected to be received under the arrangement where Group has entered into financial guarantees contracts which provide credit protection over certain assets with third parties and cash recoveries of previously written off amounts of £64m. (144) (47) (334) 1,427 Total £m 68 869 199 536 £m 44 1,000 193 298 1,535 1,672 — 37 (1) (78) 41 49 29 (263) (308) 1,220 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 304 Risk performance - Credit risk (continued) Loan commitments and financial guarantees (audited) Stage 1 Stage 2 Stage 3 Total Retail mortgages As at 1 January 2022 Net transfers between stages Business activity in the year Net drawdowns, repayments, net re- measurement and movement due to exposure and risk parameter changes Limit management and final repayments As at 31 December 2022 Retail credit cards As at 1 January 2022 Net transfers between stages Business activity in the year Net drawdowns, repayments, net re- measurement and movement due to exposure and risk parameter changes Limit management and final repayments As at 31 December 2022 Retail other As at 1 January 2022 Net transfers between stages Business activity in the year Net drawdowns, repayments, net re- measurement and movement due to exposure and risk parameter changes Limit management and final repayments As at 31 December 2022 Corporate loans As at 1 January 2022 Net transfers between stages Business activity in the year Net drawdowns, repayments, net re- measurement and movement due to exposure and risk parameter changes Limit management and final repayments As at 31 December 2022 Gross exposure £m 10,833 8 8,034 (6,793) (368) 11,714 107,980 (3,029) 35,573 ECL £m Gross exposure £m ECL £m — — — — — — Gross exposure £m 3 9 — (6) — 6 532 (17) — (21) (44) 450 4,727 2,834 408 56 (42) 27 187 195 1 — — — — — — 38 41 23 ECL £m Gross exposure £m — — — — — — 1 1 — 11,368 — 8,034 (6,820) (412) 12,170 112,894 — 35,982 ECL £m — — — — — — 95 — 50 18 11,581 (45) (2,087) 65 (73) (2) 9,421 (7,148) 144,957 (7) 50 (447) 5,435 (23) 83 (82) 228 — (7,677) — 150,620 (30) 133 10,983 (203) 2,254 (1,665) (942) 10,427 5 — — — — 5 507 121 3 (102) (9) 520 — — — — — — 10 82 2 (8) (6) 80 — — — — — — 11,500 — 2,259 (1,775) (957) 11,027 5 — — — — 5 182,346 174 29,049 5,668 44,060 66 30 (5,664) 4,273 246 (64) 54 (4) 26 1,098 22 212,493 442 (2) — 2 5 48,359 34,331 — 86 15 28,070 (51) 6,193 61 68 (54,297) (29) (9,562) 205,847 190 24,289 (65) 232 (322) 866 (4) (64,181) 23 231,002 (98) 445 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 305 Risk performance - Credit risk (continued) Stage 2 decomposition Stage 2 exposures are predominantly identified using quantitative tests where the lifetime PD has deteriorated more than a pre- determined amount since origination during the year. This is augmented by inclusion of accounts meeting the designated high risk criteria (including watchlist) for the portfolio under the qualitative test. A small number of other accounts (1.5% of impairment allowance and 2.2% of gross exposure) are included in Stage 2. These accounts are not otherwise identified by the quantitative or qualitative tests but are more than 30 days past due. The percentage triggered by these backstop criteria is a measure of the effectiveness of the Stage 2 criteria in identifying deterioration prior to delinquency. These balances include items in the Corporate and Investment Bank for reasons such as outstanding interest and fees rather than principal balances. Loans and advances at amortised cost1 Gross Exposure Impairment Allowance Quantitative test Qualitative test 30 days past due backstop Total Stage 2 Quantitative test Qualitative test 30 days past due backstop Total Stage 2 As at 31 December 2023 Retail mortgages Retail credit cards Retail other Corporate loans Total UK Retail mortgages 2 Retail credit cards 2 Retail other Corporate loans Total Rest of the World Retail mortgages 2 Retail credit cards 2 Retail other Corporate loans Total Stage 2 As at 31 December 2022 Retail mortgages Retail credit cards Retail other Corporate loans Total UK Retail mortgages Retail credit cards Retail other Corporate loans Total Rest of the World Retail mortgages Retail credit cards Retail other Corporate loans Total Stage 2 Notes £m 8,905 1,798 775 6,745 18,223 301 2,399 9 3,593 6,302 9,206 4,197 784 10,338 24,525 £m 9,106 2,020 749 10,364 22,239 361 2,999 187 3,249 6,796 9,467 5,019 936 £m 9,589 330 462 1,845 12,226 28 1,020 41 964 2,053 9,617 1,350 503 2,809 14,279 £m 8,160 547 390 2,071 11,168 72 848 76 992 1,988 8,232 1,395 466 13,613 29,035 3,063 13,156 £m 629 — 15 83 727 17 31 41 72 161 646 31 56 155 888 £m 469 2 58 93 622 32 33 8 49 122 501 35 66 142 744 £m 19,123 2,128 1,252 8,673 31,176 346 3,450 91 4,629 8,516 19,469 5,578 1,343 13,302 39,692 £m 17,735 2,569 1,197 12,528 34,029 465 3,880 271 4,290 8,906 18,200 6,449 1,468 16,818 42,935 £m 49 416 104 177 746 24 750 1 155 930 73 1,166 105 332 1,676 £m 28 404 120 212 764 19 801 26 114 960 47 1,205 146 326 1,724 £m 22 76 12 36 146 2 367 — 42 411 24 443 12 78 557 £m 17 89 17 48 171 2 304 1 45 352 19 393 18 93 523 £m 6 — 1 1 8 2 21 — 3 26 8 21 1 4 34 £m 4 — 1 4 9 3 22 1 1 27 7 22 2 5 36 £m 77 492 117 214 900 28 1,138 1 200 1,367 105 1,630 118 414 2,267 £m 49 493 138 264 944 24 1,127 28 160 1,339 73 1,620 166 424 2,283 1 Where balances satisfy more than one of the above three criteria for determining a significant increase in credit risk, the corresponding gross exposure and impairment allowance has been assigned in order of categories presented. 2 Exposures reported within Retail credit cards and Retail other exclude the German consumer finance business which has now been classified as assets held for sale. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 306 Risk performance - Credit risk (continued) Stage 3 decomposition Stage 3 is comprised of exposures that are considered to be credit impaired. An asset is considered credit impaired when one or more events occur that have a detrimental impact on the estimated future cash flows of the financial asset. This comprises assets defined as defaulted and other individually assessed exposures where imminent default or actual loss is identified. Loans and advances at amortised cost Gross Exposure Exposures individually assessed or in recovery book Exposures not charged-off Total Stage 3 Impairment Allowance Exposures not charged-off Exposures individually assessed or in recovery book Total Stage 3 As at 31 December 2023 Retail mortgages Retail credit cards Retail other Corporate loans Total UK Retail mortgages 1 Retail credit cards 1 Retail other Corporate loans Total Rest of the World Retail mortgages 1 Retail credit cards 1 Retail other Corporate loans Total Stage 3 As at 31 December 2022 Retail mortgages Retail credit cards Retail other Corporate loans Total UK Retail mortgages Retail credit cards Retail other Corporate loans Total Rest of the World Retail mortgages Retail credit cards Retail other Corporate loans Total Stage 3 Note £m 1,473 198 177 1,198 3,046 155 617 65 50 887 1,628 815 242 1,248 3,933 £m 1,211 167 156 1,504 3,038 270 551 160 43 1,024 1,481 718 316 1,547 4,062 £m 339 — 87 494 920 457 905 164 812 2,338 796 905 251 1,306 3,258 £m 270 84 137 504 995 663 578 267 521 2,029 933 662 404 1,025 3,024 £m 1,812 198 264 1,692 3,966 612 1,522 229 862 3,225 2,424 1,720 493 2,554 7,191 £m 1,481 251 293 2,008 4,033 933 1,129 427 564 3,053 2,414 1,380 720 2,572 7,086 £m 67 107 80 139 393 23 413 2 3 441 90 520 82 142 834 £m 52 124 80 125 381 23 359 45 — 427 75 483 125 125 808 £m 45 — 64 207 316 293 813 30 249 1,385 338 813 94 456 1,701 £m 6 13 65 235 319 333 459 118 182 1,092 339 472 183 417 1,411 £m 112 107 144 346 709 316 1,226 32 252 1,826 428 1,333 176 598 2,535 £m 58 137 145 360 700 356 818 163 182 1,519 414 955 308 542 2,219 1 Exposures reported within Retail credit cards and Retail other exclude the German consumer finance business which has now been classified as assets held for sale. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 307 Risk performance - Credit risk (continued) Management adjustments to models for impairment (audited) Management adjustments to impairment models are applied in order to factor in certain conditions or changes in policy that are not fully incorporated into the impairment models, or to reflect additional facts and circumstances at the period end. Management adjustments are reviewed and incorporated into future model development where applicable. Management adjustments are captured through “Economic uncertainty” and “Other” adjustments, and are presented by product and geography below: Management adjustments to models for impairment allowance presented by product and geography (audited)1 Impairment allowance pre management adjustments2 Economic uncertainty adjustments (a) Other adjustments (b) Management adjustments (a+b) Total impairment allowance3 Proportion of Management adjustments to total impairment allowance As at 31 December 2023 Retail mortgages Retail credit cards Retail other Corporate loans Total UK Retail mortgages Retail credit cards Retail other Corporate loans Total Rest of the World Total Debt securities at amortised cost Total including debt securities at amortised cost As at 31 December 2022 Retail mortgages Retail credit cards Retail other Corporate loans Total UK Retail mortgages Retail credit cards Retail other Corporate loans Total Rest of the World Total Debt securities at amortised cost Total including debt securities at amortised cost £m 54 700 251 761 1,766 354 2,855 45 828 4,082 5,848 27 5,875 £m 39 679 257 682 1,657 388 2,307 198 1,058 3,951 5,608 42 5,650 £m 57 45 9 71 182 — — — 16 16 198 — 198 £m 4 93 23 249 369 — — 2 (54) (52) 317 — 317 £m 121 (9) 62 10 184 (3) 8 (6) (4) (5) 179 — 179 £m 85 32 80 166 363 — 55 19 (229) (155) 208 — 208 £m 178 36 71 81 366 (3) 8 (6) 12 11 377 — 377 £m 89 125 103 415 732 — 55 21 (283) (207) 525 — 525 £m 232 736 322 842 2,132 351 2,863 39 840 4,093 6,225 27 6,252 £m 128 804 360 1,097 2,389 388 2,362 219 775 3,744 6,133 42 6,175 % 76.7 4.9 22.0 9.6 17.2 (0.9) 0.3 (15.4) 1.4 0.3 6.1 — 6.0 % 69.5 15.5 28.6 37.8 30.6 — 2.3 9.6 (36.5) (5.5) 8.6 — 8.5 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 308 Risk performance - Credit risk (continued) Economic uncertainty adjustments presented by stage (audited) Stage 1 Stage 2 Stage 3 Total As at 31 December 2023 Retail mortgages Retail credit cards Retail other Corporate loans Total UK Retail mortgages Retail credit cards Retail other Corporate loans Total Rest of the World Total As at 31 December 2022 Retail mortgages Retail credit cards Retail other Corporate loans Total UK Retail mortgages Retail credit cards Retail other Corporate loans Total Rest of the World Total Notes £m 12 8 3 48 71 — — — 4 4 75 £m 32 37 6 12 87 — — — 12 12 99 £m 13 — — 11 24 — — — — — 24 Stage 1 Stage 2 Stage 3 £m 1 17 7 189 214 — — — (8) (8) 206 £m 3 76 15 60 154 — — 2 (46) (44) 110 £m — — 1 — 1 — — — — — 1 £m 57 45 9 71 182 — — — 16 16 198 Total £m 4 93 23 249 369 — — 2 (54) (52) 317 1 Positive values reflect an increase in impairment allowance and negative values reflect a reduction in the impairment allowance. 2 Includes £5.2bn (2022: £4.8bn) of modelled ECL, £0.4bn (2022: £0.4bn) of individually assessed impairments and £0.3bn (2022: £0.5bn) ECL from non-modelled exposures and debt securities. 3 Total impairment allowance consists of ECL stock on drawn and undrawn exposure. Economic uncertainty adjustments Models have been developed with data from non-inflationary periods establishing a relationship between input variables and customer delinquency based on past behaviour. As such there is a risk that the modelled output fails to capture the appropriate response to changes in macroeconomic variables including higher interest rates and continuing inflationary stress with modelled impairment provisions impacted by uncertainty. This uncertainty continues to be captured in two ways. Firstly, customer uncertainty: the identification of customers and clients who may be more vulnerable to economic instability; and secondly, model uncertainty: to capture the impact from model limitations and sensitivities to specific macroeconomic parameters which are applied at a portfolio level. Economic uncertainty adjustments have decreased from last year following the re-build of UK cards and certain CIB impairment models which better capture the macroeconomic outlook. Furthermore, adjustments have been reassessed to capture affordability headwinds in UK retail lending. The balance as at 31 December 2023 is £198m (2022: £317m) and includes: Customer and client uncertainty provisions of £166m (2022: £423m): UK retail lending includes adjustments applied to customers considered most vulnerable to affordability pressures. • Retail mortgages (UK) £25m (2022: £4m): The increase primarily reflects the risk of borrowers refinancing onto higher rates in the medium term. • Retail credit cards (UK) £45m (2022: £93m): The reduction reflects the re-build of UK cards impairment models which better capture sensitivity to movements in interest rates and inflation. • Retail other (UK) £9m (2022: £23m): The reduction reflects customer resilience to affordability headwinds. Corporate loans £87m (2022: £301m): This includes an adjustment of £71m in UK to reflect possible cross default risk on Barclays’ lending in respect of clients who have taken bounce back loans and £16m in Rest of the World (ROW) to provide for downside uncertainties on European Corporates reflecting recent changes in the macroeconomic outlook. The reduction of £(214)m in UK and ROW is informed by retirement of an adjustment for high risk sectors following a granular credit risk assessment, and re-build of certain CIB impairment models which more appropriately capture downside risk. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 309 Risk performance - Credit risk (continued) Model uncertainty provisions of £32m (2022: £(106)m): Retail mortgages (UK) £32m (2022: nil ): This includes an adjustment to correct for higher recovery expectations impacted by model oversensitivity to certain macroeconomic variables. Corporate loans £nil (2022: £(106)m): The adjustment held in the previous year to correct for model oversensitivity has been retired following the re-build of certain CIB impairment models which more appropriately capture the macroeconomic outlook. Other adjustments Other adjustments are operational in nature and are expected to remain in place until they can be reflected in the underlying models. These adjustments result from data limitations and model performance related issues identified through model monitoring and other established governance processes. Other adjustments of £179m (2022: £208m) includes: Adjustments for definition of default (DOD) under the Capital Requirements Regulation and model monitoring in Retail mortgages, Retail other and Corporate loans. Retail mortgages (UK) £121m (2022: £85m): The increase reflects re-sizing of an adjustment for DOD and an ECL provision for Kensington Mortgages which was acquired during the year. Retail credit cards: • UK £(9)m (2022: £32m): The reduction is informed by retirement of operational adjustments following the re-build of UK cards impairment models. • ROW £8m (2022: £55m): The reduction is informed by retirement of an adjustment in US cards for high-risk account management (HRAM) accounts following model remediation during the year. Retail other: • UK £62m (2022: £80m): The underlying adjustments were re-sized and remain broadly in line with the previous year. • ROW £(6)m (2022: £19m): The reduction is informed by the German consumer finance business classified as assets held for sale. Corporate loans: • UK £10m (2022: £166m): The reduction is informed by retirement of model monitoring adjustments in CIB following the re-build of certain impairment models. Further, operational adjustments have been introduced during the year to remediate conservative modelled recovery expectations in the ESHLA portfolio. • ROW £(4)m (2022: £(229)m): The previously held adjustments linked to model monitoring and ECL sensitivity to the macroeconomic variable for Federal Tax Receipts have been retired following the re-build of certain CIB impairment models. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 310 Risk performance - Credit risk (continued) Climate Risk ECL assessment Barclays performed a credit risk assessment of physical and transition risk due to climate change. This was delivered through a combination of a scenario approach and targeted reviews on specific portfolios identified as more susceptible to climate risk. The analysis did not result in a separately identifiable impairment charge for year end 2023 reporting. Scenario Approach: The climate stress test macroeconomic scenario was used in lieu of the production Downside 2 scenario to determine impact on the weighted average ECL output. The output of this analysis was not significant to warrant an additional climate- related impairment charge. Specific Approach: The approach reviewed portfolios previously identified from both internal and external stress tests as more susceptible to climate risks. In particular, the UK Mortgage portfolio was reviewed to determine the impact of a plausible change in regulation requiring landlords to upgrade properties to minimum EPC rating of C in the buy-to-let portfolio. In addition, within the Wholesale portfolio, certain elevated risk sectors (predominantly Oil & Gas, Automotive and Power sectors) were subject to a review that considered probability of default impact at a counterparty level determined by individual susceptibility to transition climate risks. The output of this review did not provide variances in ECL deemed sufficiently certain to warrant raising an additional climate-related charge in 2023. Barclays acknowledges that impairment could increase over time as risks become more tangible and impact consumers and clients through physical risks or via impacts from the transition to a low carbon economy. Therefore, Barclays continues to review credit risk outputs to determine if any additional physical or transition climate risks are identified that are not sufficiently captured via model output. Refer to the Barclays resilience to climate scenarios on page 132 for further details. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 311 Risk performance - Credit risk (continued) Measurement uncertainty and sensitivity analysis The measurement of modelled ECL involves complexity and judgement, including estimation of probabilities of default (PD), loss given default (LGD), a range of unbiased future economic scenarios, estimation of expected lives, estimation of exposures at default (EAD) and assessing significant increases in credit risk. The Group uses a five-scenario model to calculate ECL. An external consensus forecast is assembled from key sources, including HM Treasury (short and medium term forecasts) and Bloomberg (based on median of economic forecasts) which forms the Baseline scenario. In addition, two adverse scenarios (Downside 1 and Downside 2) and two favourable scenarios (Upside 1 and Upside 2) are derived, with associated probability weightings. The adverse scenarios are calibrated to a broadly similar severity to the Group's internal stress tests and stress scenarios provided by regulators whilst also considering IFRS 9 specific sensitivities and non-linearity. The favourable scenarios are designed to reflect plausible upside risks to the Baseline scenario which are broadly consistent with the economic narrative approved by the Senior Scenario Review Committee. All scenarios are regenerated at a minimum semi-annually. The scenarios include key economic variables, (including GDP, unemployment, House Price Index (HPI) and base rates in both the UK and US markets), and expanded variables using statistical models based on historical correlations. The upside and downside shocks are designed to evolve over a five-year stress horizon, with all five scenarios converging to a steady state after approximately seven years. Scenarios used to calculate the Group’s ECL charge were refreshed in Q423 with the Baseline scenario reflecting the latest consensus macroeconomic forecasts available at the time of the scenario refresh. In the Baseline scenario, whilst UK and US economies avoid a recession, GDP growth remains weak in the coming quarters and beyond as restrictive monetary policies, which impact economies with a lag, continue to restrain growth. Having peaked in 2022, consumer price inflation in key regions continues to ease over 2023 and 2024. The UK and US unemployment rates rise to 4.8% and 4.4% respectively over 2024 and then stabilise. With the significant decline in inflationary pressures, major central banks refrain from further interest rate increases. UK house prices continue to decline in 2024 before stabilising and resuming the upward trend from 2025. The housing market in the US remains more resilient, with house prices continuing to grow. In the Downside 2 scenario, inflationary pressures are assumed to intensify again, mainly driven by strong wage growth. Central banks raise rates further, with the UK bank rate and the US federal fund rate each reaching 8.5% in Q324. High interest rates suddenly bring stress into the financial and non-financial system, causing joblessness to spike and triggering a housing markets crisis and central banks are forced cut interest rates aggressively. Falling demand reduces UK and US GDP and headline inflation drops to close to zero. In the Upside 2 scenario, tighter and more productive labour markets help to accelerate economic growth whilst keeping inflationary pressures under control. With inflation quickly returning to target, central banks lower interest rates, further stimulating aggregate demand and GDP growth. The methodology for estimating scenario probability weights involves simulating a range of future paths for UK and US GDP using historical data with the five scenarios mapped against the distribution of these future paths. The median is centred around the Baseline with scenarios further from the Baseline attracting a lower weighting before the five weights are normalised to total 100%. The same scenarios used in the estimation of expected credit losses are also used to inform Barclays' internal planning. The impacts across the portfolios are different because of the sensitivities of each of the portfolios to specific macroeconomic variables, for example, mortgages are highly sensitive to house prices, credit cards and unsecured consumer loans are highly sensitive to unemployment. The increases in the Downside scenario weightings reflected a reduction in GDP stress severity in the Downside scenarios which brought the GDP of these scenarios closer to the Baseline. The increases in the Upside scenario weightings were driven by the improvement in actual GDP and the Baseline scenario, bringing the Baseline scenario closer to the Upside scenarios. For further details see page 314. The economic uncertainty adjustments of £0.2bn (2022: £0.3bn) have been applied as overlays to the modelled ECL output. These adjustments consist of a customer and client uncertainty provision of £0.2bn (2022: £0.4bn) which has been applied to customers and clients considered most vulnerable to affordability pressures, and a model uncertainty adjustment of £0.0bn (2022: £(0.1)bn). For further details see pages 307 to 309. The tables below show the key macroeconomic variables used in the five scenarios (5 year annual paths), the probability weights applied to each scenario and the macroeconomic variables by scenario using ‘specific bases’ i.e. the most extreme position of each variable in the context of the scenario, for example, the highest unemployment for downside scenarios and the lowest unemployment for upside scenarios. 5-year average tables and movement over time graphs provide additional transparency. Annual paths show quarterly averages for the year (unemployment and base rate) or change in the year (GDP and HPI). Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 312 Risk performance - Credit risk (continued) Baseline As at 31 December 2023 1 UK GDP 2 UK unemployment 3 UK HPI UK bank rate 1 US GDP 4 US unemployment 5 US HPI US federal funds rate Downside 2 1 UK GDP 2 UK unemployment 3 UK HPI UK bank rate 1 US GDP 4 US unemployment 5 US HPI US federal funds rate Downside 1 1 UK GDP 2 UK unemployment 3 UK HPI UK bank rate 1 US GDP 4 US unemployment 5 US HPI US federal funds rate Upside 2 1 UK GDP 2 UK unemployment 3 UK HPI UK bank rate 1 US GDP 4 US unemployment 5 US HPI US federal funds rate Upside 1 1 UK GDP 2 UK unemployment 3 UK HPI UK bank rate 1 US GDP 4 US unemployment 5 US HPI US federal funds rate Notes 1 Average Real GDP seasonally adjusted change in year. 2 Average UK unemployment rate 16-year+. 3 Change in year end UK HPI = Halifax All Houses, All Buyers index, relative to prior year end. 4 Average US civilian unemployment rate 16-year+. 5 Change in year end US HPI = FHFA house price index, relative to prior year end. 2023 % 0.5 4.2 (3.3) 4.7 2.4 3.7 5.4 5.1 0.5 4.2 (3.3) 4.7 2.4 3.7 5.4 5.1 0.5 4.2 (3.3) 4.7 2.4 3.7 5.4 5.1 0.5 4.2 (3.3) 4.7 2.4 3.7 5.4 5.1 0.5 4.2 (3.3) 4.7 2.4 3.7 5.4 5.1 2024 % 0.3 4.7 (5.1) 4.9 1.3 4.3 3.4 5.0 (1.5) 5.2 (19.3) 6.6 (0.6) 5.2 (6.5) 6.3 (0.6) 4.9 (12.4) 5.8 0.3 4.7 (1.7) 5.7 2.4 3.9 7.8 4.3 2.8 3.5 6.1 4.3 1.4 4.3 1.2 4.6 2.0 3.9 4.7 4.7 2025 % 1.2 4.7 0.7 4.1 1.7 4.3 3.0 3.9 (2.6) 7.9 (16.8) 1.3 (2.0) 7.2 (5.7) 1.8 (0.7) 6.3 (8.3) 2.7 (0.2) 5.8 (1.4) 2.9 3.7 3.5 7.6 2.7 3.1 3.6 4.3 2.9 2.5 4.1 4.1 3.4 2.4 3.9 3.7 3.5 2026 % 1.6 4.8 3.1 3.8 1.9 4.3 3.3 3.8 2.4 6.3 14.5 1.0 3.1 5.9 7.2 1.5 2.0 5.6 8.7 2.5 2.5 5.1 5.2 2.8 2.9 3.6 4.5 2.5 2.8 3.6 4.5 2.8 2.3 4.2 3.8 3.3 2.4 4.0 3.9 3.3 2027 % 1.6 5.0 5.3 3.5 1.9 4.3 3.3 3.8 1.6 5.5 12.4 1.0 2.0 5.2 6.4 1.5 1.6 5.2 8.8 2.3 1.9 4.8 4.8 2.8 2.4 3.6 5.6 2.5 2.8 3.6 4.6 2.8 2.0 4.3 5.4 3.0 2.4 4.0 3.9 3.3 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 313 Risk performance - Credit risk (continued) Baseline As at 31 December 2022 1 UK GDP 2 UK unemployment 3 UK HPI UK bank rate 1 US GDP 4 US unemployment 5 US HPI US federal funds rate Downside 2 1 UK GDP 2 UK unemployment 3 UK HPI UK bank rate 1 US GDP 4 US unemployment 5 US HPI US federal funds rate Downside 1 1 UK GDP 2 UK unemployment 3 UK HPI UK bank rate 1 US GDP 4 US unemployment 5 US HPI US federal funds rate Upside 2 1 UK GDP 2 UK unemployment 3 UK HPI UK bank rate 1 US GDP 4 US unemployment 5 US HPI US federal funds rate Upside 1 1 UK GDP 2 UK unemployment 3 UK HPI UK bank rate 1 US GDP 4 US unemployment 5 US HPI US federal funds rate Notes 1 Average Real GDP seasonally adjusted change in year. 2 Average UK unemployment rate 16-year+. 3 Change in year end UK HPI = Halifax All Houses, All Buyers index, relative to prior year end. 4 Average US civilian unemployment rate 16-year+. 5 Change in year end US HPI = FHFA house price index, relative to prior year end. 2022 % 3.3 3.7 8.4 1.8 1.8 3.7 11.2 2.1 3.3 3.7 8.4 1.8 1.8 3.7 11.2 2.1 3.3 3.7 8.4 1.8 1.8 3.7 11.2 2.1 3.3 3.7 8.4 1.8 1.8 3.7 11.2 2.1 3.3 3.7 8.4 1.8 1.8 3.7 11.2 2.1 2023 % (0.8) 4.5 (4.7) 4.4 0.5 4.3 1.8 4.8 (3.4) 6.0 (18.3) 7.3 (2.7) 6.0 (3.1) 6.6 (2.1) 5.2 (11.7) 5.9 (1.1) 5.1 (0.7) 5.8 2.8 3.5 8.7 3.1 3.3 3.3 5.8 3.6 1.0 4.0 1.8 3.5 1.9 3.8 3.8 3.9 2024 % 0.9 4.4 (1.7) 4.1 1.2 4.7 1.5 3.6 (3.8) 8.4 (18.8) 7.9 (3.4) 8.5 (4.0) 6.9 (1.5) 6.4 (10.6) 6.1 (1.1) 6.6 (1.3) 5.4 3.7 3.4 7.5 2.6 3.5 3.3 5.1 2.9 2.3 3.9 2.9 3.3 2.3 4.0 3.3 3.4 2025 % 1.8 4.1 2.2 3.8 1.5 4.7 2.3 3.1 2.0 8.0 (7.7) 6.6 2.0 8.1 (1.9) 5.8 1.9 6.0 (2.8) 5.3 1.7 6.4 0.2 4.4 2.9 3.4 4.4 2.5 2.8 3.3 4.5 2.8 2.4 3.8 3.3 3.0 2.2 4.0 3.4 3.0 2026 % 1.9 4.2 2.2 3.4 1.5 4.7 2.4 3.0 2.3 7.4 8.2 5.5 2.6 7.1 4.8 4.6 2.1 5.8 5.2 4.6 2.1 5.9 3.6 3.9 2.4 3.4 4.2 2.5 2.8 3.3 4.5 2.8 2.1 3.8 3.2 2.8 2.2 4.0 3.4 3.0 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 314 Risk performance - Credit risk (continued) Scenario probability weighting (audited)1 As at 31 December 2023 Scenario probability weighting As at 31 December 2022 Scenario probability weighting Note Upside 2 % Upside 1 % 13.8 10.9 24.7 23.1 Baseline Downside 1 Downside 2 % 32.4 39.4 % 18.3 17.6 % 10.8 9.0 1 For further details on changes to scenario weights see page 311. Specific bases shows the most extreme position of each variable in the context of the downside/upside scenarios, for example, the highest unemployment for downside scenarios, average unemployment for baseline scenarios and lowest unemployment for upside scenarios. GDP and HPI downside and upside scenario data represents the lowest and highest cumulative position relative to the start point, in the 20 quarter period. Macroeconomic variables (specific bases) (audited)1 Upside 2 Upside 1 Baseline Downside 1 Downside 2 As at 31 December 2023 2 UK GDP 3 UK unemployment 4 UK HPI UK bank rate 2 US GDP 3 US unemployment 4 US HPI US federal funds rate As at 31 December 2022 2 UK GDP 3 UK unemployment 4 UK HPI UK bank rate 2 US GDP 3 US unemployment 4 US HPI US federal funds rate % 13.4 3.5 23.8 2.5 15.1 3.4 27.4 2.8 13.9 3.4 37.8 0.5 14.1 3.3 35.0 0.1 % 9.6 3.9 11.5 3.0 12.3 3.5 23.5 3.3 9.4 3.6 21.0 0.5 9.6 3.6 27.5 0.1 % 1.1 4.7 0.1 4.2 1.8 4.2 3.7 4.3 1.4 4.2 1.2 3.5 1.3 4.4 3.8 3.3 % (1.3) 6.5 (22.5) 6.8 0.6 5.9 0.4 6.8 (3.2) 6.6 (17.9) 6.3 (2.5) 6.7 3.7 6.0 % (4.1) 8.3 (35.0) 8.5 (1.7) 7.5 (7.6) 8.5 (6.8) 8.5 (35.0) 8.0 (6.3) 8.6 0.2 7.0 Average basis represents the average quarterly value of variables in the 20 quarter period with GDP and HPI based on yearly average and quarterly CAGRs respectively. Macroeconomic variables (5 year averages) (audited)1 Upside 2 Upside 1 Baseline Downside 1 Downside 2 As at 31 December 2023 5 UK GDP 6 UK unemployment 7 UK HPI UK bank rate 5 US GDP 6 US unemployment 7 US HPI US federal funds rate As at 31 December 2022 5 UK GDP 6 UK unemployment 7 UK HPI UK bank rate 5 US GDP 6 US unemployment 7 US HPI US federal funds rate Notes % 2.4 3.7 4.4 3.3 2.8 3.6 5.0 3.6 3.0 3.5 6.6 2.5 2.9 3.4 6.2 2.8 % 1.7 4.2 2.2 3.8 2.3 3.9 4.3 4.0 2.2 3.8 3.9 2.9 2.1 3.9 5.0 3.1 % 1.1 4.7 0.1 4.2 1.8 4.2 3.7 4.3 1.4 4.2 1.2 3.5 1.3 4.4 3.8 3.3 % 0.6 5.2 (1.7) 3.6 1.4 4.8 2.4 3.9 0.7 5.4 (2.6) 4.7 0.7 5.5 2.5 4.3 % 0.1 5.8 (3.5) 2.9 0.9 5.4 1.2 3.2 0.0 6.7 (6.4) 5.8 0.0 6.7 1.2 5.2 1 UK GDP = Real GDP growth seasonally adjusted; UK unemployment = UK unemployment rate 16-year+; UK HPI = Halifax All Houses, All Buyers Index; US GDP = Real GDP growth seasonally adjusted; US unemployment = US civilian unemployment rate 16-year+; US HPI = FHFA house price index. 20 quarter period starts from Q123 (2022: Q122). 2 Maximum growth relative to Q422 (2022: Q421), based on 20 quarter period in Upside scenarios; 5-year yearly average CAGR in Baseline; minimum growth relative to Q422 (2022: Q421), based on 20 quarter period in Downside scenarios. 3 Lowest quarter in Upside scenarios; 5-year average in Baseline; highest quarter in Downside scenarios. Period based on 20 quarters from Q123 (2022: Q122). 4 Maximum growth relative to Q422 (2022: Q421), based on 20 quarter period in Upside scenarios; 5-year quarter end CAGR in Baseline; minimum growth relative to Q422 (2022: Q421), based on 20 quarter period in Downside scenarios. 5 5-year yearly average CAGR, starting 2022 (2022: 2021). 6 5-year average, Period based on 20 quarters from Q123 (2022: Q122). 7 5-year quarter end CAGR, starting Q422 (2022: Q421). Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 315 Risk performance - Credit risk (continued) The graphs below plot the historical data for GDP growth rate and unemployment rate in the UK and US as well as the forecasted data under each of the five scenarios. UK GDP (%) US GDP (%) UK unemployment (%) US unemployment (%) GDP growth based on year on year growth each quarter (Q/(Q-4)). U2U1BLD1D22021202320252027202920312033-30-20-100102030U2U1BLD1D22021202320252027202920312033-15-10-5051015U2U1BLD1D22021202320252027202920312033012345678910U2U1BLD1D2202120232025202720292031203302468101214Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 316 Risk performance - Credit risk (continued) ECL under 100% weighted scenarios for modelled portfolios (audited) The table below shows the modelled ECL assuming each of the five modelled scenarios are 100% weighted with the dispersion of results around the Baseline, highlighting the impact on exposure and ECL across the scenarios. Model exposure uses exposure at default (EAD) values and is not directly comparable to gross exposure used in prior disclosures. As at 31 December 2023 Stage 1 Model exposure (£m) Retail mortgages 2 Retail credit cards 2 Retail other Corporate loans Stage 1 Model ECL (£m) Retail mortgages 2 Retail credit cards 2 Retail other Corporate loans Stage 1 Coverage (%) Retail mortgages Retail credit cards Retail other Corporate loans Stage 2 Model exposure (£m) Retail mortgages 2 Retail credit cards 2 Retail other Corporate loans Stage 2 Model ECL (£m) Retail mortgages 2 Retail credit cards 2 Retail other Corporate loans Stage 2 Coverage (%) Retail mortgages Retail credit cards Retail other Corporate loans Stage 3 Model exposure (£m)3 Retail mortgages 2 Retail credit cards 2 Retail other Corporate loans Stage 3 Model ECL (£m) Retail mortgages 2 Retail credit cards 2 Retail other 4 Corporate loans Stage 3 Coverage (%) Retail mortgages Retail credit cards Retail other 4 Corporate loans Total Model ECL (£m) Retail mortgages 2 Retail credit cards 2 Retail other 4 Corporate loans Total Model ECL Weighted1 Upside 2 Upside 1 Baseline Downside 1 Downside 2 Scenarios 145,226 147,415 146,653 145,405 142,543 138,925 66,512 66,459 66,482 66,497 66,580 66,580 8,749 8,915 8,841 8,758 8,631 8,479 175,282 179,567 177,923 175,903 172,328 167,541 9 562 32 275 — 0.8 0.4 0.2 4 529 31 243 — 0.8 0.3 0.1 5 545 32 257 — 0.8 0.4 0.1 7 561 32 270 — 0.8 0.4 0.2 11 584 32 298 — 0.9 0.4 0.2 22 605 31 318 — 0.9 0.4 0.2 20,615 17,769 18,702 20,149 23,836 28,822 7,076 1,382 6,897 1,216 6,976 1,290 7,064 1,373 7,183 1,500 7,387 1,653 24,374 19,919 21,621 23,763 27,445 32,375 41 23 27 34 59 1,684 1,554 1,609 1,668 1,775 85 663 0.2 23.8 6.2 2.7 1,672 1,827 164 3,436 333 1,315 95 77 19.9 72.0 57.9 2.2 383 3,561 212 1,015 5,171 72 509 0.1 22.5 5.9 2.6 1,672 1,827 164 3,436 308 1,279 94 71 18.4 70.0 57.3 2.1 335 3,362 197 823 78 565 0.1 23.1 6.0 2.6 1,672 1,827 164 3,436 316 1,296 94 73 18.9 70.9 57.3 2.1 348 3,450 204 895 84 633 0.2 23.6 6.1 2.7 1,672 1,827 164 3,436 325 1,313 95 75 19.4 71.9 57.9 2.2 366 3,542 211 978 4,717 4,897 5,097 95 782 0.2 24.7 6.3 2.8 1,672 1,827 164 3,436 351 1,341 96 82 21.0 73.4 58.5 2.4 421 3,700 223 1,162 5,506 123 1,922 105 1,031 0.4 26.0 6.4 3.2 1,672 1,827 164 3,436 393 1,366 97 89 23.5 74.8 59.1 2.6 538 3,893 233 1,438 6,102 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 317 Risk performance - Credit risk (continued) Reconciliation to total ECL Total weighted model ECL 4 ECL from individually assessed exposures ECL from non-modelled exposures and others ECL from debt securities at amortised cost ECL from post model management adjustments Of which: ECL from economic uncertainty adjustments Total ECL Notes £m 5,171 401 276 27 377 198 6,252 1 Model exposures are allocated to a stage based on an individual scenario rather than a probability-weighted approach, as required for Barclays reported impairment allowances. As a result, it is not possible to back solve the final reported weighted ECL from individual scenarios given balances may be assigned to a different stage dependent on the scenario. 2 Model exposures and ECL reported within Retail credit cards and Retail other excludes the German consumer finance business which has now been classified as assets held for sale. 3 Model exposures allocated to Stage 3 does not change in any of the scenarios as the transition criteria relies only on an observable evidence of default as at 31 December 2023 and not on macroeconomic scenario. 4 Material corporate loan defaults are individually assessed across different recovery strategies. As a result, ECL of £401m is reported as an individually assessed impairment in the reconciliation table. The use of five scenarios with associated weighting results in a total weighted ECL uplift from the Baseline ECL of 1.5%. Retail mortgages: Total weighted ECL of £383m represents a 4.6% increase over the Baseline ECL (£366m) with coverage ratios remaining steady across the Upside scenarios, Baseline and Downside 1 scenario. Under the Downside 2 scenario, total ECL increases to £538m driven by a significant fall in UK HPI. Retail credit cards: Total weighted ECL of £3,561m is broadly aligned to the Baseline ECL (£3,542m). Total ECL increases to £3,893m under the Downside 2 scenario, driven by an increase in UK and US unemployment rate. Retail other: Total weighted ECL of £212m is aligned to the Baseline ECL (£211m). Total ECL increases to £233m under the Downside 2 scenario, largely driven by an increase in UK unemployment rate. Corporate loans: Total weighted ECL of £1,015m represents a 3.8% increase over the Baseline ECL (£978m). Total ECL increases to £1,438m under the Downside 2 scenario, driven by a decrease in UK and US GDP. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 318 Risk performance - Credit risk (continued) As at 31 December 2022 Stage 1 Model exposure (£m) Retail mortgages Retail credit cards Retail other Corporate loans Stage 1 Model ECL (£m) Retail mortgages Retail credit cards Retail other Corporate loans Stage 1 Coverage (%) Retail mortgages Retail credit cards Retail other Corporate loans Stage 2 Model exposure (£m) Retail mortgages Retail credit cards Retail other Corporate loans Stage 2 Model ECL (£m) Retail mortgages Retail credit cards Retail other Corporate loans Stage 2 Coverage (%) Retail mortgages Retail credit cards Retail other Corporate loans Stage 3 Model exposure (£m)2 Retail mortgages Retail credit cards Retail other Corporate loans Stage 3 Model ECL (£m) Retail mortgages Retail credit cards Retail other 3 Corporate loans Stage 3 Coverage (%) Retail mortgages Retail credit cards Retail other 3 Corporate loans Total Model ECL (£m) Retail mortgages Retail credit cards Retail other 3 Corporate loans Total Model ECL Weighted1 Upside 2 Upside 1 Baseline Downside 1 Downside 2 Scenarios 144,701 147,754 146,873 145,322 142,599 138,619 67,204 12,282 67,622 12,428 67,352 12,341 67,080 12,235 66,908 12,111 66,636 11,986 155,794 163,699 161,070 157,710 150,435 138,226 7 509 52 341 — 0.8 0.4 0.2 3 493 45 259 — 0.7 0.4 0.2 3 503 49 290 — 0.7 0.4 0.2 4 512 52 325 — 0.8 0.4 0.2 9 517 54 397 — 0.8 0.4 0.3 30 521 55 443 — 0.8 0.5 0.3 18,723 15,670 16,551 18,102 20,825 24,805 7,611 1,559 6,551 1,386 7,118 1,485 7,691 1,601 8,313 1,741 9,062 1,881 24,935 16,858 19,550 23,031 30,432 42,837 33 1,624 124 610 0.2 21.3 8.0 2.4 1,553 1,354 216 2,891 332 880 132 70 21.4 65.0 61.1 2.4 372 3,013 308 1,021 4,714 15 1,361 96 399 0.1 20.8 6.9 2.4 1,553 1,354 216 2,891 311 861 129 66 20.0 63.6 59.7 2.3 329 2,715 270 724 18 1,487 109 470 0.1 20.9 7.3 2.4 1,553 1,354 216 2,891 317 871 131 68 20.4 64.3 60.6 2.4 338 2,861 289 828 23 1,624 124 569 0.1 21.1 7.7 2.5 1,553 1,354 216 2,891 323 881 132 70 20.8 65.1 61.1 2.4 350 3,017 308 964 4,038 4,316 4,639 45 1,811 144 816 0.2 21.8 8.3 2.7 1,553 1,354 216 2,891 347 893 134 78 22.3 66.0 62.0 2.7 401 3,221 332 1,291 5,245 151 2,032 160 1,303 0.6 22.4 8.5 3.0 1,553 1,354 216 2,891 405 902 136 85 26.1 66.6 63.0 2.9 586 3,455 351 1,831 6,223 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 319 Risk performance - Credit risk (continued) Reconciliation to total ECL Total weighted model ECL 3 ECL from individually assessed exposures ECL from non-modelled exposures and others ECL from debt securities at amortised cost ECL from post model management adjustments Of which: ECL from economic uncertainty adjustments Total ECL Notes £m 4,714 434 460 42 525 317 6,175 1 Model exposures are allocated to a stage based on an individual scenario rather than a probability-weighted approach, as required for Barclays reported impairment allowances. As a result, it is not possible to back solve the final reported weighted ECL from individual scenarios given balances may be assigned to a different stage dependent on the scenario. 2 Model exposures allocated to Stage 3 does not change in any of the scenarios as the transition criteria relies only on an observable evidence of default as at 31 December 2022 and not on macroeconomic scenario. 3 Material corporate loan defaults are individually assessed across different recovery strategies. As a result, ECL of £434m is reported as an individually assessed impairment in the reconciliation table. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 320 Risk performance - Credit risk (continued) Analysis of the concentration of credit risk A concentration of credit risk exists when a number of counterparties are located in a common geographical region or are engaged in similar activities and have similar economic characteristics that would cause their ability to meet contractual obligations to be similarly affected by changes in economic or other conditions. The Group implements limits on concentrations in order to mitigate the risk. The table below presents an industry credit risk concentration analysis of loans and advances at amortised cost net of impairment allowance including breakdown by geographical location of the counterparty or customers, impairment stage, maturity and an indicator of inclusion in carbon-related sectors. A further table is included with geography, impairment stage and maturity allocation of debt securities at amortised cost, off- balance sheet commitments and financial guarantees and contingent liabilities at amortised cost. Further detail on the Group policies with regard to managing concentration risk is presented in the Barclays PLC Pillar 3 Report 2023 (unaudited). Credit risk concentration by Industry for contractual maturity, staging and geography Loans and advances at amortised cost net of impairment allowance Industry United Kingdom Geography (audited) Stage (audited) Maturity Americas Europe Others Total Stage 1 Stage 2 Stage 3 Total < 1 year 1-5 Years >5 years Total Carbon related sectors ¹ As at 31 December 2023 Agriculture, Food and Forest Products Mining and Quarrying Manufacturing Government and central bank Banks Energy and water Materials and Building Wholesale and retail distribution and leisure Transport and storage Home Loans Business and other services Other Financial Institutions Cards, unsecured loans and other personal lending Total loans and advances at amortised cost Debt securities at amortised cost³ Total loans and advances at amortised cost including debt securities Contingent liabilities Loan commitments Total off-balance sheet² £m £m £m £m £m £m £m £m £m £m £m £m £m 3,597 — — 5 3,602 2,734 611 257 3,602 808 1,071 1,723 3,602 490 843 4,200 1,279 260 826 121 1,714 1,526 188 — 1,714 814 897 416 6,721 5,036 1,515 170 6,721 2,873 3,522 3 326 5,987 — 5 30 6,022 5,975 437 3,606 1,520 1,896 7,459 7,458 2,181 486 879 180 3,726 3,394 46 1 324 1 6,022 2,218 4 3,800 — 7,459 7,365 94 8 3,726 750 2,033 — 943 1,714 6,721 6,022 7,459 3,726 18,631 2,623 448 118 21,820 18,918 2,318 584 21,820 5,154 9,156 7,510 21,820 7,585 1,061 481 452 9,579 7,099 2,151 329 9,579 3,114 5,169 1,296 9,579 868 536 182 118 1,704 1,275 395 34 1,704 402 1,046 256 1,704 166,704 97 3,882 829 171,512 150,152 19,364 1,996 171,512 2,009 10,334 159,169 171,512 13,802 6,032 3,151 1,021 24,006 19,815 3,726 465 24,006 7,088 12,190 4,728 24,006 6,093 25,589 6,481 2,546 40,709 38,988 1,613 108 40,709 13,955 22,111 4,643 40,709 17,741 24,317 1,385 730 44,173 38,296 5,173 704 44,173 8,109 15,839 20,225 44,173 248,316 66,469 19,500 8,462 342,747 300,666 37,425 4,656 342,747 54,659 83,466 204,622 342,747 26,093 11,681 10,262 8,713 56,749 52,858 3,891 — 56,749 10,061 28,739 17,949 56,749 Yes Yes Yes Yes Yes Yes Yes 274,409 78,150 29,762 17,175 399,496 353,524 41,316 4,656 399,496 64,720 112,205 222,571 399,496 5,668 10,262 5,919 2,225 24,074 20,884 2,607 583 24,074 24,073 96,135 227,618 43,397 8,084 375,234 353,179 21,601 454 375,234 375,179 101,803 237,880 49,316 10,309 399,308 374,063 24,208 1,037 399,308 399,252 1 55 56 — 24,074 — 375,234 — 399,308 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 321 Risk performance - Credit risk (continued) Loans and advances at amortised cost net of impairment allowance Industry United Kingdom Geography (audited) Stage (audited) Maturity Americas Europe Others Total Stage 1 Stage 2 Stage 3 Total < 1 year 1-5 Years >5 years Total Carbon related sectors ¹ £m £m £m £m £m £m £m £m £m £m £m £m £m As at 31 December 2022 Agriculture, Food and Forest Products Mining and Quarrying Materials and Building Wholesale and retail distribution and leisure Transport and storage Home Loans Business and other services Other Financial Institutions Cards, unsecured loans and other personal lending Total loans and advances at amortised cost Debt securities at amortised cost³ Total loans and advances at amortised cost including debt securities Contingent liabilities Loan commitments Total off-balance sheet² Notes 3,762 — — 3,762 — 2,706 757 299 3,762 743 1,226 1,793 Manufacturing 4,929 1,683 578 757 152 803 1,529 8,025 42 610 1,292 208 5,935 1,981 1,529 8,025 29 109 642 796 3,165 4,483 91 377 Government and central bank Banks 6,306 — 16 434 781 3,406 1,472 2,251 Energy and water 1,825 751 1,278 196 6,743 7,870 3,379 13 37 657 6,756 7,910 4,050 — 3 14 2,489 7,535 50 4,217 375 734 2,464 — 852 3,762 1,529 8,025 6,756 7,910 4,050 6,756 7,910 4,050 22,572 11,362 2,235 173,815 22,761 37,602 19,694 2,264 438 176 8,939 1,176 679 568 1,111 598 186 340 164,946 763 6,698 1,408 13,754 6,019 1,645 1,343 6,113 23,502 5,916 2,071 18,768 3,396 408 22,572 4,188 10,233 8,151 22,572 8,084 2,913 365 11,362 3,754 6,079 1,529 11,362 1,706 456 2,235 73 553 1,379 303 2,994 11,562 159,259 2,235 173,815 153,684 18,127 2,004 18,059 4,042 660 35,617 1,883 102 173,815 22,761 37,602 6,058 13,397 3,306 22,761 12,587 21,426 3,589 37,602 19,472 24,854 5,749 838 50,913 43,930 6,182 801 50,913 10,550 19,340 21,023 50,913 252,210 65,773 25,032 10,277 353,292 307,773 40,652 4,867 353,292 55,992 92,810 204,490 353,292 18,344 9,078 7,452 10,613 45,487 41,715 3,772 45,487 — 4,424 27,824 13,239 45,487 270,554 74,851 32,484 20,890 398,779 349,488 44,424 4,867 398,779 60,416 120,634 217,729 398,779 6,485 9,987 4,699 1,611 22,782 19,472 2,768 542 22,782 22,781 103,185 229,716 42,118 7,018 382,037 353,473 27,926 638 382,037 382,000 109,670 239,703 46,817 8,629 404,819 372,945 30,694 1,180 404,819 404,781 1 37 38 22,782 382,037 — — — 404,819 Yes Yes Yes Yes Yes Yes Yes 1 Refer to Carbon related assets table on page 285 for more details on the "Exposures towards sectors that highly contribute to carbon related assets" under the respective Industry sectors. 2 The Off-balance sheet contingent liabilities and loan commitments excludes the fair value balance of £16,469m in 2023 (2022: £14,894m) and includes exposures relating to financial assets classified as assets held for sale. 3 Debt securities at amortised cost primarily includes £34,237m (2022: £27,233m) in Government and central bank, £16,265m (2022: £11,579m) in other financial institutions, £2,854m (2022: £3,457m) in materials & building and £1,516m (2022: £1,816m) in Banks. - For analysis of Debt securities by issuer, refer to "Analysis of Debt Securities" on page 334. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 322 Risk performance - Credit risk (continued) The approach to management and representation of credit quality Asset credit quality The credit quality distribution is based on the IFRS 9 12-month probability of default (PD) at the reporting date to ensure comparability with other ECL disclosures in the Expected Credit Losses section. The following internal measures are used to determine credit quality for loans: PD Range % Internal Default Grade Band 0.00 to < 0.15 0.15 to < 0.25 0.25 to < 0.50 0.50 to < 0.75 0.75 to < 2.50 2.50 to < 10.00 10.00 to < 100.00 100.00 (Default) 1 2 3 4 5 6 7 8 9 10 11 12 12 13 14 15 15 16 17 18 19 19 20 21 22 >Min 0.00% 0.02% 0.03% 0.05% 0.10% 0.15% 0.20% 0.25% 0.30% 0.40% 0.50% 0.60% 0.75% 1.20% 1.55% 2.15% 2.50% 3.05% 4.45% 6.35% 8.65% Default Probability Mid 0.01% 0.03% 0.04% 0.08% 0.13% 0.18% 0.23% 0.28% 0.35% 0.45% 0.55% 0.68% 0.98% 1.38% 1.85% 2.33% 2.78% 3.75% 5.40% 7.50% 9.32% 10.00% 11.35% 18.65% 10.67% 15.00% 30.00% <=Max 0.02% 0.03% 0.05% 0.10% 0.15% 0.20% 0.25% 0.30% 0.40% 0.50% 0.60% 0.75% 1.20% 1.55% 2.15% 2.50% 3.05% 4.45% 6.35% 8.65% 10.00% 11.35% 18.65% 99.99% 100% 100% 100% Credit Quality description Moody’s Standard and Poor’s Aaa, Aa1, Aa2 AAA, AA+, AA Strong Strong Strong Strong Aa3 A1, A2, A3 A1, A2, A3 Baa1 Baa2 Baa2 Baa3 Baa3 Ba1 Ba1 AA- A+ A, A- BBB+ BBB BBB BBB- BBB- BB+ BB+ Satisfactory Ba1, Ba2 BB, BB- Ba1, Ba2, Ba3 BB, BB- Satisfactory Ba3 Ba3 B1 B1 B2 Satisfactory B3, Caa1 B3, Caa1 B3, Caa1 Satisfactory B3, Caa1 BB- B+ B+ B+ B+ B B- B- B- Higher Risk Caa2 CCC+ Higher Risk Caa3, Ca, C Credit Impaired D CCC, CCC-, CC+ ,CC, C D For retail clients, a range of analytical tools is used to derive the probability of default of clients at inception and on an ongoing basis. For loans that are not past due, these descriptions can be summarised as follows: Strong: there is a very high likelihood of the asset being recovered in full. Satisfactory: while there is a high likelihood that the asset will be recovered and therefore, of no cause for concern to the Group, the asset may not be collateralised, or may relate to unsecured retail facilities. At the lower end of this grade there are customers that are being more carefully monitored, for example, corporate customers which are indicating some evidence of deterioration, home loans with a high loan to value, and unsecured retail loans operating outside normal product guidelines. Higher risk: there is concern over the obligor’s ability to make payments when due. However, these have not yet converted to actual delinquency. There may also be doubts over the value of collateral or security provided. However, the borrower or counterparty is continuing to make payments when due and is expected to settle all outstanding amounts of principal and interest. Loans that are past due are monitored closely, with impairment allowances raised as appropriate and in line with the Group’s impairment policies. Debt securities For assets held at fair value, the carrying value on the balance sheet will include, among other things, the credit risk of the issuer. Most listed and some unlisted securities are rated by external rating agencies. The Group mainly uses external credit ratings provided by Standard & Poor’s, Fitch or Moody’s. Where such ratings are not available or are not current, the Group will use its own internal ratings for the securities. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 323 Risk performance - Credit risk (continued) Balance sheet credit quality The following tables present the credit quality of the Group’s assets exposed to credit risk. Overview As at 31 December 2023, the ratio of the Group’s on-balance sheet assets classified as strong (0.0 to <0.60%) remained stable at 87% (2022: 87%) of total assets exposed to credit risk. Further analysis of debt securities by issuer and issuer type and netting and collateral arrangements on derivative financial instruments is presented in the Analysis of debt securities section and Analysis of derivatives section. Balance sheet credit quality (audited) As at 31 December 2023 Cash and balances at central banks Cash collateral and settlement balances Loans and advances at amortised cost: Retail mortgages Retail credit cards Retail other Corporate loans Total loans and advances at amortised cost Debt securities at amortised cost Reverse repurchase agreements and other similar secured lending Trading portfolio assets: Debt securities Traded loans Total trading portfolio assets Financial assets at fair value through the income statement: Loans and advances Debt securities Reverse repurchase agreements Other financial assets Total financial assets at fair value through the income statement Derivative financial instruments Financial assets at fair value through other comprehensive income Other assets Assets held for sale Total on-balance sheet PD Range PD range 0.0 to <0.60% 0.60 to <11.35% 11.35 to 100% Total 0.0 to <0.60% 0.60 to <11.35% 11.35 to 100% £m £m £m £m % 224,634 99,092 — 9,789 — 8 224,634 108,889 100 91 160,647 10,201 6,005 89,972 266,825 56,398 8,313 22,322 3,490 32,824 66,949 350 2,552 171,512 1,698 457 4,266 8,973 1 34,221 9,952 127,062 342,747 56,749 2,424 170 — 2,594 65,469 4,006 9,642 5,893 69,475 15,535 387 2,754 3,141 75,498 12,653 88,151 30,509 16,852 1,449 1,095 278 42 47,639 2,586 112,799 35,988 344 149,131 88 22 — 110 144,845 245,086 53,957 11,616 664 199,466 134 256,836 71,375 2,138 1,110 1,183,402 455 56 2,618 161,495 — 3 127 13,051 71,830 2,197 3,855 1,357,948 94 30 60 71 77 99 93 86 32 78 64 56 76 80 73 95 99 97 29 87 % — 9 5 65 35 26 20 1 7 13 46 18 35 42 24 20 27 5 1 3 68 12 % — — 1 5 5 3 3 — — 1 22 4 1 2 — — — — — — 3 1 Total % 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 324 Risk performance - Credit risk (continued) Balance sheet credit quality (audited) PD Range PD range 0.0 to <0.60% 0.60 to <11.35% 11.35 to 100% Total 0.0 to <0.60% 0.60 to <11.35% 11.35 to 100% £m £m £m £m % As at 31 December 2022 Cash and balances at central banks Cash collateral and settlement balances Loans and advances at amortised cost: Retail mortgages Retail credit cards Retail other Corporate loans Total loans and advances at amortised cost Debt securities at amortised cost Reverse repurchase agreements and other similar secured lending Trading portfolio assets: Debt securities Traded loans Total trading portfolio assets Financial assets at fair value through the income statement: Loans and advances Debt securities Reverse repurchase agreements Other financial assets Total financial assets at fair value through the income statement Derivative financial instruments Financial assets at fair value through other comprehensive income Other assets Assets held for sale Total on-balance sheet 256,351 101,365 — 10,944 — 288 256,351 112,597 167,368 12,312 9,672 83,966 273,318 45,295 3,866 20,668 4,840 40,737 70,111 189 2,536 173,770 1,604 572 5,151 9,863 3 34,584 15,084 129,854 353,292 45,487 776 — — 776 50,253 3,214 53,467 4,891 8,273 13,164 331 1,711 2,042 55,475 13,198 68,673 14,684 2,122 124,794 98 141,698 284,491 65,051 1,599 — 24,630 1,062 38,339 20 64,051 17,606 3 57 — 115 65 1,548 — 39,429 3,249 164,681 118 1,728 283 207,477 302,380 — — — 65,054 1,656 — 1,223,411 176,125 14,207 1,413,743 100 90 97 35 64 65 77 100 100 90 24 78 38 65 76 83 68 94 100 97 — 87 % — 10 2 60 32 31 20 — — 9 63 19 62 33 23 17 31 6 — 3 — 12 % — — 1 5 4 4 3 — — 1 13 3 — 2 1 — 1 — — — — 1 Total % 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 — 100 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 325 Risk performance - Credit risk (continued) Credit exposures by internal PD grade The below tables represent credit risk profiles by PD grade for loans and advances at amortised cost, contingent liabilities and loan commitments. Stage 1 higher risk assets, presented gross of associated collateral held, are of weaker credit quality but have not significantly deteriorated since origination. IFRS 9 Stage 1 and Stage 2 classification is not dependent solely on the absolute probability of default but on elements that determine a Significant Increase in Credit Risk, including relative movement in probability of default since initial recognition. There is therefore no direct relationship between credit quality and IFRS 9 stage classification. Credit risk profile by internal PD grade for retail mortgages (audited) PD range Grading % As at 31 December 2023 Gross carrying amount Allowance for ECL Credit quality description Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 £m £m £m £m £m £m £m 1 - 3 4 - 5 6 - 8 9 - 11 12 - 14 15 - 19 20 - 21 22 Total 0.0 to <0.05% 0.05 to <0.15% 0.15 to <0.30% 0.30 to <0.60% Strong Strong Strong Strong 0.60 to <2.15% Satisfactory 2.15 to <11.35% Satisfactory 11.35 to <100% Higher Risk 100% Credit Impaired 25,759 587 — 26,346 58,656 3,386 — 62,042 51,292 7,235 — 58,527 11,350 2,447 — 13,797 2,833 3,114 — 5,947 194 2,243 457 118 — — 2,437 — 575 — 2,424 2,424 150,202 19,469 2,424 172,095 1 12 18 12 6 1 — — 50 — 2 8 12 25 39 19 — 105 Total £m Net exposure Coverage ratio £m % 1 26,345 14 62,028 26 58,501 24 13,773 31 5,916 40 2,397 19 556 — — — 0.2 0.5 1.6 3.3 — — — — — — — 428 428 428 1,996 583 171,512 17.7 0.3 Credit risk profile by internal PD grade for retail credit cards (audited)4 PD Range Grading % As at 31 December 2023 Gross carrying amount Allowance for ECL Credit quality description Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 £m £m £m £m £m £m £m Total £m Net exposure Coverage ratio £m % 1 - 3 4 - 5 6 - 8 9 - 11 12 - 14 15 - 19 20 - 21 22 Total 0.0 to <0.05% 0.05 to <0.15% 0.15 to <0.30% 0.30 to <0.60% Strong Strong Strong Strong 0.60 to <2.15% Satisfactory 2.15 to <11.35% Satisfactory 11.35 to <100% Higher Risk 100% Credit Impaired 133 1,463 3,374 5,248 11,010 — 4 6 11 173 8,867 3,436 314 1,948 — 133 — 1,467 — 3,380 — 5,259 — 11,183 — 12,303 — 2,262 — — 1,720 1,720 — 2 9 27 137 314 34 — — — — — 14 699 917 — — — — — — 2 9 133 1,465 3,371 27 5,232 151 11,032 — 1,013 11,290 — 951 1,311 — 1,333 1,333 387 30,409 5,578 1,720 37,707 523 1,630 1,333 3,486 34,221 — 0.1 0.3 0.5 1.4 8.2 42.0 77.5 9.2 Credit risk profile by internal PD grade for retail other (audited)4 PD Range Grading % As at 31 December 2023 Gross carrying amount Allowance for ECL Credit quality description Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 £m £m £m £m £m £m £m 1 - 3 4 - 5 6 - 8 9 - 11 12 - 14 15 - 19 20 - 21 22 Total 0.0 to <0.05% 0.05 to <0.15% 0.15 to <0.30% 0.30 to <0.60% Strong Strong Strong Strong 0.60 to <2.15% Satisfactory 2.15 to <11.35% Satisfactory 11.35 to <100% Higher Risk 100% Credit Impaired 67 569 964 4,369 1,899 583 18 — — 4 6 50 241 862 180 — — — — 67 573 970 — 4,419 — 2,140 — 1,445 — 493 198 493 8,469 1,343 493 10,305 1 1 2 16 15 22 2 — 59 — — — 4 15 43 56 — 118 — — — — — — — 176 176 Total £m Net exposure Coverage ratio £m % 1 1 2 66 572 968 20 4,399 30 2,110 65 1,380 58 176 140 317 353 9,952 1.5 0.2 0.2 0.5 1.4 4.5 29.3 35.7 3.4 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 326 Risk performance - Credit risk (continued) Credit risk profile by internal PD grade for corporate loans (audited) PD Range Grading % As at 31 December 2023 Gross carrying amount Allowance for ECL Credit quality description Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 £m £m £m £m £m £m £m Total £m Net exposure Coverage ratio £m % 1 - 3 4 - 5 6 - 8 9 - 11 12 - 14 15 - 19 20 - 21 22 Total 0.0 to <0.05% 0.05 to <0.15% 0.15 to <0.30% 0.30 to <0.60% Strong Strong Strong Strong 0.60 to <2.15% Satisfactory 2.15 to <11.35% Satisfactory 11.35 to <100% Higher Risk 100% Credit Impaired 36,981 23,344 10,833 17,914 146 92 346 390 17,433 4,694 5,779 5,360 221 2,274 4 37,131 — 23,436 — 11,179 — 18,304 — 22,127 — 11,139 — 2,495 — 112,505 — 13,302 2,550 2,554 2,550 128,361 4 15 9 41 106 101 11 — 287 — — 3 4 68 167 172 — 414 2 — — — — — — 6 37,125 15 23,421 12 11,167 45 18,259 174 21,953 268 10,871 183 2,312 — 0.1 0.1 0.2 0.8 2.4 7.3 596 598 596 1,299 1,954 127,062 23.4 1.0 Credit risk profile by internal PD grade for loans and advances at amortised cost (audited)4 PD Range Grading % As at 31 December 2023 Gross carrying amount Allowance for ECL Credit quality description Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 £m £m £m £m £m £m £m Total £m Net exposure Coverage ratio £m % 1 - 3 4 - 5 6 - 8 9 - 11 12 - 14 15 - 19 20 - 21 22 Total 0.0 to <0.05% 0.05 to <0.15% 0.15 to <0.30% 0.30 to <0.60% Strong Strong Strong Strong 0.60 to <2.15% Satisfactory 2.15 to <11.35% Satisfactory 11.35 to <100% Higher Risk 100% Credit Impaired 62,940 733 84,032 3,486 66,463 7,593 38,881 2,898 33,175 8,222 15,423 11,901 671 4,859 4 63,677 — 87,518 — 74,056 — 41,779 — 41,397 — 27,324 — 5,530 6 30 38 96 264 438 — 2 11 20 122 948 2 — — — — 8 63,669 32 87,486 49 74,007 116 41,663 386 41,011 — 1,386 25,938 47 1,164 — 1,211 4,319 — 301,585 — 39,692 7,187 7,191 7,187 348,468 — 919 — 2,267 2,533 2,535 2,533 5,721 4,654 342,747 — — 0.1 0.3 0.9 5.1 21.9 35.2 1.6 Credit risk profile by internal PD grade for retail mortgages (audited) PD Range Grading % As at 31 December 2022 Gross carrying amount Allowance for ECL Credit quality description Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 £m £m £m £m £m £m £m 1 - 3 4 - 5 6 - 8 9 - 11 12 - 14 15 - 19 20 - 21 22 Total 0.0 to <0.05% 0.05 to <0.15% 0.15 to <0.30% 0.30 to <0.60% Strong Strong Strong Strong 0.60 to <2.15% Satisfactory 2.15 to <11.35% Satisfactory 11.35 to <100% Higher Risk 100% Credit Impaired 32,991 762 93,388 8,851 11,346 2,957 14,830 2,290 888 1,674 63 1,281 166 385 — 33,753 — 102,239 — 14,303 — 17,120 — 2,562 — 1,344 — 551 — 153,672 — 18,200 2,414 2,414 2,414 174,286 1 9 4 14 1 — — — 29 — 5 5 9 16 23 15 — 73 — — — — — — — 414 414 Credit risk profile by internal PD grade for retail credit cards (audited) PD Range Grading % As at 31 December 2022 Gross carrying amount Allowance for ECL Credit quality description Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 £m £m £m £m £m £m £m Total £m Net exposure Coverage ratio £m % 1 33,752 14 102,225 9 14,294 23 17,097 17 2,545 23 1,321 15 414 516 536 2,000 173,770 — — 0.1 0.1 0.7 1.7 2.7 17.1 0.3 Total £m Net exposure Coverage ratio £m % 1 - 3 4 - 5 6 - 8 9 - 11 12 - 14 15 - 19 20 - 21 22 Total 0.0 to <0.05% 0.05 to <0.15% 0.15 to <0.30% 0.30 to <0.60% Strong Strong Strong Strong 194 2,556 4,139 5,446 3 3 5 18 0.60 to <2.15% Satisfactory 4,370 1,370 2.15 to <11.35% Satisfactory 12,719 3,463 11.35 to <100% Higher Risk 364 1,587 — 197 — 2,559 — 4,144 — 5,464 — 5,740 — 16,182 — 1,951 — 6 14 30 57 299 52 — — — 2 145 753 720 — — — — — — 197 6 2,553 14 4,130 32 5,432 202 5,538 — 1,052 15,130 — 772 1,179 100% Credit Impaired — 29,788 — 6,449 1,380 1,380 1,380 37,617 — 458 — 1,620 955 955 955 3,033 425 34,584 — 0.2 0.3 0.6 3.5 6.5 39.6 69.2 8.1 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 327 Risk performance - Credit risk (continued) Credit risk profile by internal PD grade for retail other (audited) PD Range Grading % As at 31 December 2022 Gross carrying amount Allowance for ECL Credit quality description Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 £m £m £m £m £m £m £m 1 - 3 4 - 5 6 - 8 9 - 11 12 - 14 15 - 19 20 - 21 22 Total 0.0 to <0.05% 0.05 to <0.15% 0.15 to <0.30% 0.30 to <0.60% Strong Strong Strong Strong 0.60 to <2.15% Satisfactory 2.15 to <11.35% Satisfactory 11.35 to <100% Higher Risk 100% Credit Impaired 101 816 1,350 7,379 2,875 924 25 1 6 9 55 260 929 208 — — 102 822 — 1,359 — 7,434 — 3,135 — 1,853 — 233 1 1 3 36 21 36 2 — — — 4 19 72 71 — — — — — — — — 13,470 — 1,468 720 720 720 15,658 — 100 — 166 308 308 Credit risk profile by internal PD grade for corporate loans (audited) PD Range Grading % As at 31 December 2022 Gross carrying amount Allowance for ECL Credit quality description Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 £m £m £m £m £m £m £m Total £m Net exposure Coverage ratio £m % 1 1 3 101 821 1,356 40 7,394 40 3,095 108 1,745 73 308 574 160 412 15,084 1.0 0.1 0.2 0.5 1.3 5.8 31.3 42.8 3.7 Total £m Net exposure Coverage ratio £m % 1 - 3 4 - 5 6 - 8 9 - 11 12 - 14 15 - 19 20 - 21 22 Total 0.0 to <0.05% 0.05 to <0.15% 0.15 to <0.30% 0.30 to <0.60% Strong Strong Strong Strong 35,960 21,674 767 234 11,046 1,389 12,214 774 0.60 to <2.15% Satisfactory 19,612 3,494 2.15 to <11.35% Satisfactory 10,820 7,432 11.35 to <100% Higher Risk 565 2,728 5 36,732 — 21,908 — 12,435 — 12,988 — 23,106 — 18,252 — 3,293 100% Credit Impaired — 111,891 — 16,818 2,567 2,572 2,567 131,281 5 9 17 38 223 153 16 — 461 11 1 5 8 66 179 154 — 424 3 — — — — — — 19 36,713 10 21,898 22 12,413 46 12,942 289 22,817 332 17,920 170 3,123 0.1 — 0.2 0.4 1.3 1.8 5.2 539 542 539 1,427 2,028 129,854 21.0 1.1 Credit risk profile by internal PD grade for loans and advances at amortised cost (audited) PD Range Grading % As at 31 December 2022 Gross carrying amount Allowance for ECL Credit quality description Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 £m £m £m £m £m £m £m Total £m Net exposure Coverage ratio £m % 1 - 3 4 - 5 6 - 8 9 - 11 12 - 14 15 - 19 20 - 21 22 Total 0.0 to <0.05% 0.05 to <0.15% 0.15 to <0.30% 0.30 to <0.60% Strong Strong Strong Strong 69,246 1,533 118,434 9,094 27,881 4,360 39,869 3,137 0.60 to <2.15% Satisfactory 27,745 6,798 5 70,784 — 127,528 — 32,241 — 43,006 — 34,543 7 25 38 118 302 11 6 10 23 246 3 — — — — 21 70,763 31 127,497 48 32,193 141 42,865 548 33,995 2.15 to <11.35% Satisfactory 24,526 13,105 — 37,631 488 1,027 — 1,515 36,116 11.35 to <100% Higher Risk 1,120 4,908 — 6,028 70 960 — 1,030 4,998 100% Credit Impaired — 308,821 — 42,935 7,081 7,086 7,081 358,842 — 1,048 — 2,283 2,216 2,219 2,216 5,550 4,865 353,292 — — 0.1 0.3 1.6 4.0 17.1 31.3 1.5 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 328 Risk performance - Credit risk (continued) Credit risk profile by internal PD grade for contingent liabilities (audited)1 PD range Grading % As at 31 December 2023 Credit quality description Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 £m £m £m £m £m £m £m Total £m Net exposure Coverage ratio £m % Gross carrying amount Allowance for ECL 1-3 4-5 6-8 9-11 12-14 15-19 20-21 22 Total 0.0 to <0.05% 0.05 to <0.15% 0.15 to <0.30% 0.30 to <0.60% Strong Strong Strong Strong 0.60 to <2.15% Satisfactory 2.15 to <11.35% Satisfactory 11.35 to <100% Higher Risk 100% Credit Impaired 7,582 3,337 3,211 2,848 2,388 79 3 157 285 701 1,501 1,027 — 7,661 — 3,340 — 3,368 — 3,133 — 3,089 — 2,528 17 — 355 — — 583 372 583 20,884 2,607 583 24,074 As at 31 December 2022 1-3 4-5 6-8 9-11 12-14 15-19 20-21 22 Total Strong 0.0 to <0.05% Strong 0.05 to <0.15% Strong 0.15 to <0.30% Strong 0.30 to <0.60% 0.60 to <2.15% Satisfactory 2.15 to <11.35% Satisfactory 11.35 to <100% Higher Risk 100% Credit Impaired 5,695 4,210 2,733 3,161 1,989 1,626 58 — 19,472 149 348 180 214 751 686 440 — 2,768 — — — — — — — 542 542 5,844 4,558 2,913 3,375 2,740 2,312 498 542 22,782 Credit risk profile by internal PD grade for loan commitments (audited)1 1 2 3 3 8 29 1 — 47 7 2 3 8 21 49 2 — 92 — — 1 4 6 41 61 — 113 1 1 3 1 6 35 64 — 111 — — — — — — — 22 22 — — — — — — — 3 3 1 2 4 7 7,660 3,338 3,364 3,126 14 3,075 70 2,458 62 22 182 310 561 23,892 8 3 6 9 27 84 66 3 206 5,836 4,555 2,907 3,366 2,713 2,228 432 539 22,576 — 0.1 0.1 0.2 0.5 2.8 16.7 3.8 0.8 0.1 0.2 0.2 0.3 1.0 3.6 13.3 0.6 0.9 PD range Grading % As at 31 December 2023 Gross carrying amount Allowance for ECL Credit quality description Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 £m £m £m £m £m £m £m Total £m Net exposure Coverage ratio £m % 1-3 4-5 6-8 9-11 12-14 15-19 20-21 22 Total 0.0 to <0.05% 0.05 to <0.15% 0.15 to <0.30% 0.30 to <0.60% Strong Strong Strong Strong 0.60 to <2.15% Satisfactory 2.15 to <11.35% Satisfactory 11.35 to <100% Higher Risk 100% Credit Impaired 77,689 75,399 715 479 — 78,404 — 75,878 63,545 2,798 — 66,343 66,423 1,441 — 67,864 54,686 4,177 — 58,863 14,690 8,275 747 3,716 — 22,965 — 4,463 — — 454 454 2 6 12 22 38 40 6 — — 1 1 2 15 71 84 — 353,179 21,601 454 375,234 126 174 As at 31 December 2022 1-3 4-5 6-8 9-11 12-14 15-19 20-21 22 Total Notes 0.0 to <0.05% 0.05 to <0.15% 0.15 to <0.30% 0.30 to <0.60% Strong Strong Strong Strong 78,077 752 85,917 4,004 67,381 2,349 57,553 2,081 0.60 to <2.15% Satisfactory 33,465 6,681 2.15 to <11.35% Satisfactory 30,374 8,068 — 78,829 — 89,921 — 69,730 — 59,634 — 40,146 — 38,442 11.35 to <100% Higher Risk 100% Credit Impaired 706 — 3,991 — — 638 4,697 638 3 7 13 15 50 62 3 — 1 1 2 4 28 86 82 — 353,473 27,926 638 382,037 153 204 — — — — — — — 22 22 — — — — — — — 20 20 2 7 78,402 75,871 13 66,330 24 67,840 53 58,810 111 22,854 90 4,373 22 432 322 374,912 4 8 78,825 89,913 15 69,715 19 59,615 78 40,068 148 38,294 85 20 4,612 618 377 381,660 — — — — 0.1 0.5 2.0 4.8 0.1 — — — — 0.2 0.4 1.8 3.1 0.1 1 Excludes loan commitments and financial guarantees of £16.5bn (2022: £14.9bn) carried at fair value. 2 PD bandings 2.15% to <10% and 10% to <11.35% have been merged for an enhanced presentation. The prior period comparative has been aligned accordingly. 3 Loan commitments reported also include exposures relating to financial assets classified as assets held for sale. 4 Exposures reported within Retail credit cards and Retail other does not include the German consumer finance business which is classified as assets held for sale. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 329 Risk performance - Credit risk (continued) Analysis of specific portfolios and asset types This section provides an analysis of principal portfolios and businesses, in particular, home loans, credit cards, unsecured loans and other retail lending. Secured home loans The UK home loans portfolio comprises first lien home loans and accounts for 95% (2022: 93%) of the Group’s total home loan balances. Home loans principal portfolios As at 31 December Gross loans and advances (£m) >90 day arrears, excluding recovery book (%) Annualised gross charge-off rates (%) Recovery book proportion of outstanding balances (%) 1 Recovery book impairment coverage ratio (%) Note 1 Recovery Book Impairment Coverage Ratio excludes KMC. Within the UK home loans portfolio: Barclays UK 2023 163,639 2022 162,380 0.2 0.5 0.6 7.2 0.1 0.5 0.5 5.2 • Gross loans and advances increased by £1.3bn (0.8%) following an increase in Residential (1.2%), and a decrease in Buy to Let (BTL) (2.1%). • Owner-occupied interest-only home loans comprised 17% (2022: 17%) of total balances. The average balance weighted LTV on owner occupied loans increased to 53.1% (2022: 50.0%). • BTL home loans comprised 12.3% (2022: 12.7%) of total balances. In BTL, the average balance weighted LTV increased to 56.9% (2022: 53.2%). Home loans principal portfolios - distribution of balances by LTV1 Distribution of Balances Distribution of impairment allowance Coverage ratio Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total % % % % % % % % % % % % 73.5 12.3 1.5 — 78.8 8.8 0.6 — 10.4 1.2 0.1 — 10.5 0.5 — — 0.9 0.1 — — 0.8 — — — 84.8 13.6 1.6 — 90.1 9.3 0.6 — 8.5 7.4 1.2 0.3 10.2 3.9 0.3 0.1 16.2 16.7 2.5 0.7 30.8 9.7 0.3 0.6 26.7 12.8 3.6 3.4 33.2 5.2 2.4 3.3 51.4 36.9 7.3 4.4 74.2 18.8 3.0 4.0 — 0.1 0.1 1.0 — — — 0.4 0.2 1.9 2.6 12.1 0.2 1.4 1.5 21.4 3.8 27.9 63.3 100.0 2.9 30.8 85.0 64.9 0.1 0.4 0.6 12.4 0.1 0.1 0.4 13.1 Barclays UK As at 31 December 2023 <=75% >75% and <=90% >90% and <=100% >100% As at 31 December 2022 <=75% >75% and <=90% >90% and <=100% >100% Note 1 Portfolio marked to market based on the most updated valuation including recovery book balances. Updated valuations reflect the application of the latest HPI available as at 31 December 2023. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 330 Risk performance - Credit risk (continued) Home loans principal portfolios – average LTV As at 31 December Overall portfolio LTV (%): Balance weighted % Valuation weighted % For >100% LTVs: Balances £m Marked to market collateral £m Average LTV: Balance weighted % Average LTV: Valuation weighted % % of Balances in Recoveries Home loans principal portfolios - new lending As at 31 December 2023 New Home loan bookings (£m) New home loan proportion above 90% LTV (%) Average LTV on new home loan: balance weighted (%) Average LTV on new home loan: valuation weighted (%) Barclays UK 2023 2022 53.6 40.0 75 65 146.7 123.6 11.5 Barclays UK 2023 22,669 0.6 62.6 53.8 50.4 37.3 34 26 210.6 145.5 18.9 2022 30,307 2.8 68.1 59.6 New home loans bookings in 2023 decreased 25% to £22.7bn (2022: 30.3bn) and the 90 day arrears rate increased to 0.2% (2022: 0.1%), mainly driven by economic conditions that resulted in general mortgage market suppression, including higher mortgage payments as rates continued to rise and increased cost of living factors in line with inflation in 2023. Head Office: Italian home loans and advances at amortised cost reduced to £3.6bn (2022: £4.5bn) and continue to run-off since new bookings ceased in 2016. The portfolio is secured on residential property with an average balance weighted mark to market LTV of 55.6% (2022: 58.8%). 90-day arrears increased to 2.4% (2022: 1.2%) due to deterioration caused by affordability stress related to rising inflation and interest rates. The gross charge-off rate was broadly stable at 0.7% (2022: 0.6%). Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 331 Risk performance - Credit risk (continued) Retail Credit Cards and Retail Other The principal portfolios listed below accounted for 91% (2022: 87%) of the Group’s total retail credit cards and retail other. Retail Credit Cards and Retail Other As at 31 December 2023 Barclays UK UK cards UK personal loans Barclays Partner Finance Barclays International US cards As at 31 December 2022 Barclays UK UK cards UK personal loans Barclays Partner Finance Barclays International US cards German consumer finance business Retail Credit Cards and Retail Other held for sale As at 31 December 2023 Barclays International Gross exposure 30 day arrears rate, excluding recoveries book 90 day arrears rate, excluding recoveries book Annualised gross write-off rates Annualised net write-off rates £m % % % % 10,420 3,641 2,344 27,286 9,939 4,023 2,612 25,554 4,269 0.9 1.5 0.6 2.9 0.9 1.4 0.5 2.2 1.7 0.2 0.6 0.3 1.5 0.2 0.6 0.2 1.2 0.7 1.4 1.3 0.7 2.3 3.7 4.1 0.7 2.4 0.7 1.3 1.0 0.7 2.3 3.6 3.8 0.7 2.3 0.6 Gross exposure 30 day arrears rate, excluding recoveries book 90 day arrears rate, excluding recoveries book Annualised gross write-off rates Annualised net write-off rates 1.0 4,094 1.7 0.8 1.0 German consumer finance business UK cards: 30 day and 90 day arrears rates remained stable at 0.9% (2022: 0.9%) and 0.2% (2022: 0.2%) respectively. Total exposure increased from £9.9bn to £10.4bn due to growth in spend and promotional balances. Both the gross and net write off rates decreased by 2.3% driven by the impact of a strategy change in 2022 to align the point of charge off and write off in that year and lower charge off rates in 2023. UK personal loans: 30 and 90 day arrears rates have remained broadly stable at 1.5% (2022: 1.4%) and 0.6% (2022: 0.6%) respectively. Both the gross and net write off rates decreased by 2.8%, driven by the impact of a strategy change in 2022 to align the point of charge off and write off in that year and by the impact of large bulk sales in 2022 which reduced the flow to write off in 2023. Barclays Partner Finance: 30 and 90 day arrears rates increased marginally to 0.6% (2022: 0.5%) and 0.3% (2022: 0.2%) respectively as the weighting of lower risk customers with larger balances reduced. Total exposure fell to £2.3bn (2022: £2.6bn) due to a strategic decision to reduce the number of active partner businesses. Annualised gross and net write off rates remained stable. US cards: 30 and 90 day arrears rates increased to 2.9% (2022: 2.2%) and 1.5% (2022: 1.2%) respectively due to an anticipated higher flow into and through delinquency, as rates returned to pre-pandemic levels. Write off rates remained broadly stable at 2.3%. German consumer finance business: Gross exposure decreased 4% following business reprioritisation and discontinuation of Open Market loans originations. 30 and 90 day arrears rates remained stable and write-off rates increased due to the impact of accepting higher loan amount applications during 2022, which has since been discontinued. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 332 Risk performance - Credit risk (continued) Forbearance Forbearance measures consist of concessions towards a debtor that is experiencing or about to experience difficulties in meeting their financial commitments ('financial difficulties') Analysis of forbearance programmes Balances Impairment allowance As at 31 December 2023 Barclays UK Barclays International Head Office Total retail Barclays UK Barclays International Head Office Total wholesale Group total As at 31 December 2022 1 Barclays UK Barclays International Head Office Total retail 2 Barclays UK Barclays International Head Office Total wholesale Group total Stage 1 Stage 2 Stage 3 £m 59 — 39 98 133 2 — 135 233 73 1 20 94 102 — — 102 196 £m £m 82 — 20 102 224 1,196 — 1,420 1,522 151 3 30 184 188 903 — 514 290 60 864 502 649 — 1,151 2,015 391 243 101 735 636 698 — 1,091 1,275 1,334 2,069 Total £m 655 290 119 1,064 859 1,847 — 2,706 3,770 615 247 151 1,013 926 1,601 — 2,527 3,540 Stage 1 Stage 2 Stage 3 £m — — — — 1 — — 1 1 1 — — 1 1 — — 1 2 £m 12 — 2 14 3 29 — 32 46 26 — 2 28 5 21 — 26 54 £m 137 128 9 274 52 125 — 177 451 143 114 15 272 57 108 — 165 437 Total £m 149 128 11 288 56 154 — 210 498 170 114 17 301 63 129 — 192 493 Retail balances on forbearance reflected increases in UK Home Finance and US cards. Wholesale balances subject to forbearance increased to £2.7bn (2022: £2.5bn) with increases in exposure in Corporate Bank and Investment Bank of £107m and £155m respectively. Impairment allowances increased to £210m (2022: £192m) with a range of new cases, partially offset by write offs. Barclays International accounted for 68% of wholesale forbearance with corporate cases representing 87% of these balances. Notes 1 Following a review of forbearance programmes across Barclays UK in 2023 which resulted in the identification of a segment of written off balances inflating the forbearance stock, UK cards 2022 balances have been updated to reflect a decrease of £74m with a corresponding decrease in ECL of £2m. 2 Following a review of forbearance programmes across Barclays UK in 2023 which resulted in 'Breathing Space', a 1–2-month cessation of interest and customer contact to allow businesses to talk to all creditors now being included within Business Banking for the first time, UK Business Banking 2022 balances have been updated to reflect an increase of £222m with a corresponding increase in ECL of £11m. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 333 Risk performance - Credit risk (continued) Retail forbearance programmes Forbearance on the Group’s principal retail portfolios is presented below. The principal portfolios account for 99% (2022: 99%) of total retail forbearance balances. Analysis of Key Portfolios in Forbearance Programmes Balances on Forbearance Programmes % of gross retail loans and advances Marked to market LTV of forbearance balances: balance weighted Marked to market LTV of forbearance balances: valuation weighted Impairment allowances marked against balances on forbearance programmes Total balances on forbearance programmes coverage ratio As at 31 December 2023 Barclays UK UK Home Loans UK cards UK personal loans Barclays Partner Finance Barclays International US cards Head Office Italy Mortgages As at 31 December 2022 Barclays UK UK Home Loans 1 UK cards UK personal loans Barclays Partner Finance Barclays International US cards German consumer finance business Head Office Italy Mortgages Total £m 366 215 46 17 290 119 263 265 59 16 206 40 151 £m % % £m % 0.2 2.1 1.3 0.7 1.1 3.3 0.2 2.7 1.5 0.6 0.8 0.9 3.4 44.7 n/a n/a n/a n/a 32.2 n/a n/a n/a 15 86 30 10 n/a 128 59.8 44.6 11 39.6 n/a n/a n/a n/a n/a 28.3 n/a n/a n/a n/a n/a 61.1 45.2 4 116 33 10 87 27 17 4.1 40.0 65.2 58.8 44.1 9.2 1.5 43.8 55.9 62.5 42.2 67.5 11.3 Analysis of Portfolios- held for sale in Forbearance Programmes Balances on Forbearance Programmes Marked to market LTV of forbearance balances: balance weighted Marked to market LTV of forbearance balances: valuation weighted Impairment allowances marked against balances on forbearance programmes Total balances on forbearance programmes coverage ratio £m % % £m % % of gross retail loans and advances Total £m As at 31 December 2023 Barclays International German consumer finance business Note 32 0.8 n/a n/a 22 68.8 1 Following a review of forbearance programmes across Barclays UK in 2023 which resulted in the identification of a segment of written off balances inflating the forbearance stock, UK cards 2022 balances have been updated to reflect a decrease of £74m with a corresponding decrease in ECL of £2m. UK home loans: Forbearance balances rose to £366m (2022: £263m) due to an increase in less-than-interest-only payment arrangements and concessionary interest rates given to support customers facing rising mortgage interest rates and increased affordability stress. UK cards: Balances on forbearance decreased to £215m (2022: £265m) due to increased outflow, against a stable forbearance inflow across 2023. UK personal loans: Balances on forbearance programmes decreased to £46m (2022: £59m), as inflow steadily reduced across 2023, flattening in Q423, and outflow remained stable. Barclays Partner Finance: Balances on forbearance remained stable and aligned to the total delinquent stock. US cards: Forbearance balances increased to £290m (2022: £206m) reflecting an increase in new enrolments in 2023 in line with increased delinquency trends as more customers required assistance. German consumer finance business: Forbearance balances decreased to £32m (2022: £40m) due to lower customer demand and increased operational focus on early delinquency stages. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 334 Risk performance - Credit risk (continued) Italian home loans: Forbearance balances decreased to £119m (2022: £151m) due to the continued availability of COVID-related government schemes, which are not classified as forbearance, and exits from pre-COVID forbearance schemes. Wholesale forbearance programmes The table below details balance information for wholesale forbearance cases. Analysis of wholesale balances in forbearance programmes As at 31 December 2023 Barclays UK Barclays International Total As at 31 December 2022 1 Barclays UK Barclays International Total Note Balances on forbearance programmes Total balances £m 859 1,847 2,706 926 1,601 2,527 % of gross wholesale loans and advances % 2.0 1.3 1.5 2.0 1.2 1.4 Impairment allowances marked against balances on forbearance programmes Total balances on forbearance programmes coverage ratio £m 56 154 210 63 129 192 % 6.5 % 8.3 % 7.8 % 6.8 % 8.1 % 7.6 % 1 Following a review of forbearance programmes across Barclays UK in 2023 which resulted in 'Breathing Space', a 1–2-month cessation of interest and customer contact to allow businesses to talk to all creditors now being included within Business Banking for the first time, UK Business Banking 2022 balances have been updated to reflect an increase of £222m with a corresponding increase in ECL of £11m. Analysis of debt securities Debt securities include government securities held as part of the Group’s treasury management portfolio for liquidity and regulatory purposes, and are for use on a continuing basis in the activities of the Group. The following tables provide an analysis of debt securities held by the Group for trading and investment purposes by issuer type. Further information on the credit quality of debt securities is presented in the Balance sheet credit quality section. Debt securities As at 31 December Of which issued by: Governments and other public bodies Corporate and other issuers US agency Mortgage and asset backed securities Total 2023 £m 130,816 43,001 12,907 19,168 205,892 % 63.5 20.9 6.3 9.3 100 2022 £m 106,676 41,794 6,399 14,174 169,043 % 63.1 24.7 3.8 8.4 100 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 335 Risk performance - Credit risk (continued) Analysis of derivatives The tables below set out the fair values of the derivative assets together with the value of those assets subject to enforceable counterparty netting arrangements for which the Group holds offsetting liabilities and eligible collateral. Derivative assets (audited) As at 31 December Foreign exchange Interest rate Credit derivatives Equity and stock index Commodity derivatives Total derivative assets Cash collateral held Net exposure less collateral 2023 Balance sheet assets Counterparty netting £m 89,533 109,609 7,662 48,171 1,861 £m 69,570 79,861 6,758 40,946 1,674 256,836 198,809 2022 Balance sheet assets Counterparty netting £m £m 109,938 134,579 5,423 48,665 3,775 88,096 101,646 4,356 41,200 3,039 302,380 238,337 Net exposure £m 19,963 29,748 904 7,225 187 58,027 31,211 26,816 Net exposure £m 21,842 32,933 1,067 7,465 736 64,043 34,547 29,496 Derivative asset exposures would be £230bn (2022: £273bn) lower than reported under IFRS if netting were permitted for assets and liabilities with the same counterparty or for which the Group holds cash collateral. Similarly, derivative liabilities would be £(223)bn (2022: £(264)bn) lower reflecting counterparty netting and collateral placed. In addition, non-cash collateral of £10bn (2022: £11bn) was held in respect of derivative assets. The Group received collateral from clients in support of over the counter derivative transactions. These transactions are generally undertaken under International Swaps and Derivative Association (ISDA) agreements governed by either UK or New York law. The table below sets out the fair value and notional amounts of OTC derivative instruments by type of collateral arrangement. Derivatives by collateral arrangement Unilateral in favour of Barclays Foreign exchange Interest rate Credit derivatives Equity and stock index Total unilateral in favour of Barclays Unilateral in favour of counterparty Foreign exchange Interest rate Credit derivatives Equity and stock index Total unilateral in favour of counterparty Bilateral arrangement Foreign exchange Interest rate Credit derivatives Equity and stock index Commodity derivatives Total bilateral arrangement Uncollateralised derivatives Foreign exchange Interest rate Credit derivatives Equity and stock index Commodity derivatives Total uncollateralised derivatives Total OTC derivative assets/(liabilities) Notional contract amount £m 36,163 15,950 1,216 478 53,807 18,365 42,791 716 1,406 63,278 2023 Fair value Assets £m 986 161 9 15 1,171 595 2,207 — 115 2,917 6,139,730 19,202,160 572,188 433,737 4,431 83,319 100,071 4,749 13,390 43 26,352,246 201,572 372,404 419,568 13,352 13,159 303 4,102 2,357 178 4,272 1 818,786 27,288,117 10,910 216,570 Liabilities £m Notional contract amount £m 2022 Fair value Assets £m 1,130 151 26 3 37,149 17,967 823 19 55,958 1,310 22,673 61,158 144 492 638 2,270 — 96 Liabilities £m (677) (57) (224) (2) (960) (637) (2,752) — (26) 84,467 3,004 (3,415) 5,381,723 14,566,844 582,943 393,664 4,303 102,077 124,463 3,635 9,505 14 (95,377) (107,895) (3,790) (12,280) (50) 20,929,477 239,694 (219,392) 349,569 287,026 35,933 16,101 108 5,638 3,119 601 3,075 — (6,979) (6,864) (717) (4,416) (1) 688,737 21,758,639 12,433 256,441 (18,977) (242,744) (611) (51) (394) (45) (1,101) (484) (2,726) — (59) (3,269) (76,345) (86,135) (5,278) (19,890) (2) (187,650) (5,324) (4,088) (333) (5,785) (2) (15,532) (207,552) Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 336 Risk performance - Market risk Market risk Summary of contents Outlines key measures used to summarise the market risk profile of the bank such as value at risk (VaR). The Group discloses details on management measures of market risk. Total management VaR includes all trading positions and is presented on a diversified basis by risk factor. This section also outlines the macroeconomic conditions modelled as part of the Group’s risk management framework. Market risk overview and summary of performance Traded market risk Review of management measures – The daily average, maximum and minimum values of management Page 336 336 336 337 Summary of performance in the period Traded market risk review Review of management measures Average management VaR increased 17% to £42m (2022: £36m) and the range narrowed. The increase was driven by the impact of funded, fair value leverage loan exposure in Investment Banking since Q4 2022, partially offset by lower market volatility and credit spread levels in 2023 as geopolitical tensions eased, relative to 2022, inflation declined and the pace of interest rate rises moderated. Management VaR declined in 2023 from a high of £73m in November 2022, driven by a reduction in the size of the funded, fair value leverage loan exposure in Investment Banking. The following disclosures provide details on management measures of market risk. Refer to the market risk management section of the Barclays PLC Pillar 3 Report 2023 (unaudited) for more detail on management measures and the differences when compared to regulatory measures. The table below shows the total management VaR on a diversified basis by risk factor. Total management VaR includes all trading positions in CIB and Treasury and it is calculated with a one-day holding period, measured to a confidence level of 95%. Limits are applied against each risk factor VaR as well as total management VaR, which are then cascaded further by risk managers to each business. Market risk All disclosures in this section are unaudited unless otherwise stated. Overview This section contains key statistics describing the market risk profile of the Group. The market risk management section provides a description of management VaR. Measures of market risk in the Group and accounting measures Traded market risk measures such as VaR and balance sheet exposure measures have fundamental differences: • balance sheet measures show accruals- based balances or marked to market values as at the reporting date; • VaR measures also take account of current marked to market values, but in addition hedging effects between positions are considered; • market risk measures are expressed in terms of changes in value or volatilities as opposed to static values. For these reasons, it is not possible to present direct reconciliations of traded market risk and accounting measures. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 337 Risk performance - Market risk (continued) The daily average, high and low values of management VaR Management VaR (95%, one day) (audited) For the year ended 31 December Credit risk Interest rate risk Equity risk Basis risk Spread risk Foreign exchange risk Commodity risk Inflation risk 1 Diversification effect Total management VaR Note 2023 Average High1 £m 40 15 6 13 9 4 — 6 (51) 42 £m 57 25 10 25 14 9 1 11 n/a 60 Low1 £m 22 9 3 8 5 1 — 2 n/a 24 2022 Average High1 £m 25 13 10 12 7 8 — 6 (45) 36 £m 71 23 29 24 11 25 1 17 n/a 73 Low1 £m 8 4 4 4 3 2 — 3 n/a 13 1 Diversification effects recognise that forecast losses from different assets or businesses are unlikely to occur concurrently, hence the expected aggregate loss is lower than the sum of the expected losses from each area. Historical correlations between losses are taken into account in making these assessments. The high and low VaR figures reported for each category did not necessarily occur on the same day as the high and low VaR reported as a whole. Consequently, a diversification effect balance for the high and low VaR figures would not be meaningful and is therefore omitted from the above table. Group Management VaR (£m) 100 75 50 25 0 Dec 2021 Dec 2022 Dec 2023 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 338 Risk performance - Treasury and Capital risk Treasury and Capital risk Treasury and Capital risk: summary of contents Liquidity risk performance The risk that the firm is unable to meet its contractual or contingent obligations or that it does not have the appropriate amount, tenor and composition of funding and liquidity to support its assets. This section provides an overview of the Group’s liquidity risk. Liquidity overview and summary of performance Liquidity risk stress testing – Internal Liquidity Stress Tests – Liquidity regulation – Liquidity coverage ratio – Net stable funding ratio The liquidity pool is held unencumbered and is intended to offset stress outflows. Liquidity pool The basis for sound liquidity risk management is a funding structure that reduces the probability of a liquidity stress leading to an inability to meet funding obligations as they fall due. – Composition of the liquidity pool – Liquidity pool by currency – Management of the liquidity pool – Contingent liquidity Funding structure and funding relationships – Deposit funding – Wholesale funding Provides details on the contractual maturity of all financial instruments and other assets and liabilities. Capital risk performance Contractual maturity of financial assets and liabilities Page 339 339 339 340 341 341 341 341 342 342 342 342 343 343 346 Capital risk is the risk that the firm has an insufficient level or composition of capital to support its normal business activities and to meet its regulatory capital requirements under normal operating environments or stressed conditions (both actual and as defined for internal planning or regulatory testing purposes). This also includes the risk from the firm’s pension plans. This section details the Group’s capital position providing information on both capital resources and capital requirements. It also provides details of the leverage ratios and exposures. This section outlines the Group’s capital ratios, capital composition, and provides information on significant movements in CET1 capital during the year. Capital risk overview and summary of performance 350 Regulatory minimum capital, leverage and MREL requirements – Capital – Leverage Analysis of capital resources Capital ratios – Capital resources – Movement in CET1 capital This section outlines risk weighted assets by risk type, business and macro drivers. Analysis of risk weighted assets This section outlines the Group’s leverage ratios, leverage exposure composition, and provides information on significant movements in the IFRS and leverage balance sheet. – Risk weighted assets by risk type and business – Movement analysis of risk weighted assets Analysis of leverage ratios and exposures – Leverage ratios and exposures The Group discloses the two sources of foreign exchange risk that it is exposed to. Foreign exchange risk A review focusing on the UK retirement fund, which represents the majority of the Group’s total retirement benefit obligation. – Transactional foreign currency exposure – Translational foreign exchange exposure – Functional currency of operations Pension risk review – Assets and liabilities – IAS 19 position – Risk measurement 350 350 350 351 351 351 352 353 353 353 354 354 355 355 355 355 355 355 356 356 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 339 Risk performance - Treasury and Capital risk (continued) Interest rate risk in the banking book performance A description of the non-traded market risk framework is provided. Net interest income sensitivity The Group discloses a sensitivity analysis on pre-tax net interest income for non- trading financial assets and liabilities. The analysis is carried out by business unit and currency. – by business unit – by currency The Group measures some non-traded market risks, in particular prepayment, recruitment, and residual risk using an economic capital methodology. The Group discloses the overall impact of a parallel shift in interest rates on other comprehensive income and cash flow hedges. The Group measures the volatility of the value of the FVOCI instruments in the liquidity pool through non-traded market risk VaR. Analysis of equity sensitivity Volatility of the FVOCI portfolio in the liquidity pool Page 357 357 358 358 358 Liquidity risk Summary of performance Liquidity risk stress testing All disclosures in this section are unaudited unless otherwise stated. Overview The Group Liquidity Risk is managed within Treasury and Capital Risk framework and is designed to maintain liquidity resources that are sufficient in amount and quality, and a funding profile that is appropriate to meet the Group’s Liquidity Risk Appetite and PRA Regulatory requirements. The liquidity risk framework is delivered via a combination of policy formation, review and governance, analysis, stress testing, limit setting and monitoring. This section provides an analysis of the Group’s: (i) summary of performance, (ii) liquidity risk stress testing, iii) liquidity regulation, iv) liquidity pool, (v) funding structure and funding relationships, (vi) credit ratings, and (vii) contractual maturity of financial assets and liabilities. For further detail on liquidity risk governance and framework, refer to pages 172 to 174 of the Barclays PLC Pillar 3 Report 2023 (unaudited). Key metrics 1 Liquidity Coverage Ratio 161% 2 Net Stable Funding Ratio 138% 1 LCR represents average of the last 12 spot month end ratios. 2 NSFR represents average of the last four spot quarter end ratios. The liquidity pool at £298bn (December 2022: £318bn) reflects the Group’s prudent approach to liquidity management. The Average Liquidity Coverage Ratio (LCR) remained well above the 100% regulatory requirement at 161% (December 2022: 156%), equivalent to a surplus of 118bn (December 2022: £114bn). The decrease in the liquidity pool over the year was driven by a decrease in wholesale funding, a slight reduction in net deposits where a decrease in Barclays UK deposits is largely offset by a growth in Corporate Bank deposits, and changes in business funding consumption. A decrease in net stress outflows led by an increase in the proportion of corporate deposits treated as operational led to an increase in the LCR ratio. The Net Stable Funding Ratio (average of last four quarter ends) was 138%, which represents a surplus of £167bn above the 100% regulatory requirement. During the year, the Group issued £14.1bn of minimum requirement for own funds and eligible liabilities (MREL) instruments in a range of tenors and currencies. Barclays Bank PLC continued to issue in the shorter-term and medium-term markets and Barclays Bank UK PLC continued to issue in the shorter-term markets and maintain active secured funding programmes. This funding capacity enables the respective entities to maintain their stable and diversified funding bases. The Group’s reliance on short-term wholesale funding, as measured by the proportion of wholesale funding maturing in less than one year decreased year-on- year to 33% (December 2022: 39%). Barclays’ Liquidity Risk is managed within the Principal Risk: Treasury and Capital Risk Framework. Under this framework, the Group has established a liquidity risk appetite together with the appropriate limits for the management of the liquidity risk. This is the level of liquidity risk the Group chooses to take in pursuit of its business objectives and in meeting its regulatory obligations. The Group sets its internal liquidity risk appetite based on internal liquidity risk stress tests and, external regulatory requirements namely the Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR). Internal Liquidity Stress Tests (ILST formally known as LRA) The Internal Liquidity Risk Stress Test measures the potential contractual and contingent stress outflows under a range of internally defined stress scenarios, which are then used to determine the size of the liquidity pool that is immediately available to meet anticipated outflows should a stress occur. As part of the ILST, the Group runs four liquidity stress scenarios, aligned to the PRA’s prescribed stresses: • 90 days market-wide stress event • 30 days Barclays-specific stress event • 30 days combined market-wide and Barclays-specific stress event • 12 months market wide stress Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 340 Risk performance - Treasury and Capital risk (continued) Key ILST assumptions For the year ended 31 December 2023 Drivers of Liquidity Risk Wholesale Secured and Unsecured Funding Risk Retail and Corporate Funding Risk Intraday Liquidity Risk Intra-Group Liquidity Risk Cross-Currency Liquidity Risk Off-Balance Sheet Liquidity Risk Franchise-Viability Risk ILST Combined stress – key assumptions Zero rollover of maturing wholesale unsecured funding Partial loss of repo capacity on non-extremely liquid repos at contractual maturity date Roll of repo for extremely liquid repo at wider haircut at contractual maturity date Withdrawal of contractual buyback obligations, excess client futures margin, Prime Brokerage (PB) client cash and overlifts Haircuts applied to the market value of marketable assets held in the liquidity buffer Retail and Corporate deposit outflows as counterparties seek to diversify their deposit balances Liquidity held to meet increased intraday liquidity usage due to payment and receipts volatility, loss of unsecured credit lines and haircuts applied to collateral values used to back secured credit lines, in a stress Liquidity support for material subsidiaries. Surplus liquidity held within certain subsidiaries is not taken as a benefit to the wider Group Deterioration in FX market capacity that may result in restriction in net currency positions (managed as a separate framework) Drawdown on committed facilities based on facility and counterparty type Collateral outflows due to a two-notch credit rating downgrade Increase in the Group's initial margin requirement across all major exchanges Variation margin outflows from collateralised risk positions Outflow of collateral owing but not called Loss of internal sources of funding within the PB synthetics business Liquidity held to enable the firm to meet select non-contractual obligations to ensure market confidence in the firm is maintained, including debt buy-backs, swap tear-ups and increased prime brokerage margin debits Funding Concentration Risk Funding from counterparties providing greater than 1% of total funding As at 31 December 2023, the Group held eligible liquid assets well in excess of 100% of net stress outflows of the 30 days combined scenario, which has the highest net outflows of the three short-term liquidity stress scenarios and the 12 month market-wide scenario. Liquidity regulation Barclays Group monitors its position against both the LCR and NSFR according to the PRA regulatory requirements which include certain Basel III standards that were retained in the UK regulatory framework from 1 January 2022 as part of the UK's withdrawal from the EU. The LCR requirement takes into account the relative stability of different sources of funding and potential incremental funding requirements in a stress. The LCR is designed to promote short-term resilience of a bank's liquidity risk profile by holding sufficient High Quality Liquid Assets (HQLA) to survive an acute stress scenario lasting for 30 days. The NSFR has been developed to promote a sustainable and stable structure of assets and liabilities. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 341 Risk performance - Treasury and Capital risk (continued) Liquidity coverage ratio The external LCR requirement is designed to promote short-term resilience of a bank’s liquidity risk profile by holding sufficient High Quality Liquid Assets (HQLA) to survive an acute stress scenario lasting for 30 days. Liquidity Coverage Ratio (LCR)1 2023 2022 As at 31 December LCR Eligible High Quality Liquid Assets (HQLA) Net stress outflows Surplus Liquidity coverage ratio Note £bn 310 (192) 118 161 % £bn 320 (206) 114 156 % 1 Liquidity Coverage Ratio is now shown on an average basis, based on the average of the last 12 spot month end ratios. The HQLA, Net Stress outflow, and Surplus balances in the table above are average month end balances for the past 12 months. Prior period HQLA, Net Stress Outflows, Surplus & LCR comparatives have been updated for consistency. Net Stable Funding Ratio (NSFR) The external NSFR metric requires banks to maintain a stable funding profile taking into account both on and certain off balance sheet exposures over a medium to long term period. The ratio is defined as the Available Stable Funding (capital and certain liabilities which are defined as stable sources of funding) relative to the Required Stable Funding (a measure of assets on the balance sheet and certain off balance sheet exposures which may require longer term funding). The NSFR was 138% at December 2023 ( December 2022: 137%) (average of last four quarter ends) equivalent to a surplus of £167bn (2022: £155bn) above the regulatory requirement and demonstrates Barclays’ stable balance sheet funding profile. Net Stable Funding Ratio (NSFR)1 Total Available Stable Funding Total Required Stable Funding Surplus Net Stable Funding Ratio Note 1 Average represents the last four spot quarter end ratios. 2023 £bn 607 440 167 138 % 2022 £bn 576 421 155 137 % As part of the liquidity risk appetite, Barclays establishes minimum LCR, NSFR and internal liquidity stress test limits. The Group plans to maintain its surplus to the internal and regulatory requirements at an efficient level. Risks to market funding conditions, the Group’s liquidity position and funding profile are assessed continuously, and actions are taken to manage the size of the liquidity pool and the funding profile as appropriate. Liquidity pool The Group liquidity pool as at 31 December 2023 was £298bn (2022: £318bn). In 2023, the month-end liquidity pool ranged from £298bn to £342bn (2022: £309bn to £359bn), and the month-end average balance was £328bn (2022: £331bn). The liquidity pool is held unencumbered and is intended to offset stress outflows. It comprises the following cash and unencumbered assets. Composition of the Group liquidity pool as at 31 December 2023 LCR eligible High Quality Liquid Assets (HQLA)1 Liquidity pool Cash and deposits with central banks2 Government bonds3 AAA to AA- A+ to A- BBB+ to BBB- Total government bonds Other Government guaranteed issuers, PSEs and GSEs International organisations and MDBs Covered bonds Other Total other Total as at 31 December 2023 Total as at 31 December 2022 Notes Cash £bn 211 211 248 Level 1 Level 2A Level 2B £bn £bn £bn 40 1 1 42 4 3 3 10 52 31 5 1 6 3 3 9 15 2 2 2 1 Total £bn 211 45 2 1 48 4 3 6 2 15 274 295 2023 £bn 232 48 1 1 50 5 3 7 1 16 298 2022 £bn 263 39 3 — 42 6 2 5 — 13 318 1 The LCR eligible HQLA is adjusted for operational restrictions upon consolidation under Article 8 of the Liquidity Coverage Ratio section of the PRA rulebook (CRR) such as trapped liquidity within Barclays subsidiaries. It also reflects differences in eligibility of assets between the LCR and Barclays’ Liquidity Pool. 2 Includes cash held at central banks and surplus cash at central banks related to payment schemes. Of which over 99% (2022: over 99%) was placed with the Bank of England, US Federal Reserve, European Central Bank, Bank of Japan and Swiss National Bank. 3 Of which over 80% (2022: over 79%) comprised UK, US, French, German, Japanese, Swiss and Dutch securities. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 342 Risk performance - Treasury and Capital risk (continued) The Group liquidity pool is well diversified by major currency and the Group monitors ILST stress scenarios for major currencies. Liquidity pool by currency Liquidity pool as at 31 December 2023 Liquidity pool as at 31 December 2022 Management of the liquidity pool USD £bn 82 72 EUR £bn 76 79 GBP £bn 117 142 Other £bn 23 25 Total £bn 298 318 The composition of the liquidity pool is subject to limits set by the Board and the independent liquidity risk, credit risk and market risk functions. In addition, the investment of the liquidity pool is monitored for concentration risk by issuer, currency and asset type. Given the returns generated by these highly liquid assets, the risk and reward profile is continuously managed. As at 31 December 2023, 59% (2022: 60%) of the liquidity pool was located in Barclays Bank PLC, 22% (2022: 25%) in Barclays Bank UK PLC and 11% (2022: 9%) in Barclays Bank Ireland PLC. The residual portion of the liquidity pool is held outside of these entities, predominantly in the US subsidiaries, to meet entity-specific stress outflows and local regulatory requirements. To the extent the use of this portion of the liquidity pool is restricted due to local regulatory requirements, it is assumed to be unavailable to the rest of the Group in calculating the LCR. Contingent liquidity In addition to the Group liquidity pool, the Group has access to other unencumbered assets which provide a source of contingent liquidity. While these are not relied on in the Group’s ILST, a portion of these assets may be monetised in a stress to generate liquidity through their use as collateral for secured funding or through outright sale. In a Barclays-specific, market-wide or combined liquidity stress, liquidity available via market sources could be severely disrupted. In circumstances where market liquidity is unavailable or available only at significantly elevated prices, the Group could generate liquidity via central bank facilities. To this end, as at 31 December 2023, the Group had £72.5bn (December 2022: £83.3bn) of assets positioned at various central banks. For more detail on the Group’s other unencumbered assets, see pages 197 to 201 of the Barclays PLC Pillar 3 Report 2023 (unaudited). Funding structure and funding relationships The basis for sound liquidity risk management is a funding structure that reduces the probability of a liquidity stress leading to an inability to meet funding obligations as they fall due. The Group’s overall funding strategy is to develop a diversified funding base (geographically, by type and by counterparty) and maintain access to a variety of alternative funding sources, to provide protection against unexpected fluctuations, while minimising the cost of funding. Within this, the Group aims to align the sources and uses of funding. As such, retail and corporate loans and advances are largely funded by deposits in the relevant entities, with the surplus primarily funding the liquidity pool. The majority of reverse repurchase agreements are matched by repurchase agreements. Derivative liabilities and assets are largely matched. A substantial proportion of balance sheet derivative positions qualify for counterparty netting and the remaining portions are largely offset when netted against cash collateral received and paid. Wholesale debt and equity is used to fund residual assets. These funding relationships are summarised below: Assets 1 Loans and advances at amortised cost Group liquidity pool Reverse repurchase agreements, trading portfolio assets, cash collateral and settlement balances Derivative financial instruments 2 Other assets Total assets Notes 2023 £bn 386 298 435 257 101 1,477 2022 £bn Liabilities 385 Deposits at amortised cost 318 <1 Year wholesale funding >1 Year wholesale funding Repurchase agreements, trading portfolio liabilities, cash collateral and settlement balances 412 302 Derivative financial instruments 97 Other liabilities Equity 1,514 Total liabilities 2023 £bn 539 59 118 380 250 59 72 2022 £bn 546 73 111 370 290 55 69 1,477 1,514 1 Adjusted for liquidity pool debt securities reported at amortised costs of £18bn (December 2022: £14bn). 2 Other assets include fair value assets that are not part of reverse repurchase agreements or trading portfolio assets, and other asset categories. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 343 Risk performance - Treasury and Capital risk (continued) Deposit funding Funding of loans and advances As at 31 December 2023 Barclays UK Barclays International Head Office Barclays Group Note 2023 2022 Loans and advances,debt securities at amortised cost £bn 221 174 4 399 Deposits at amortised cost Loan: deposit ratio1 Loan: deposit ratio £bn 241 298 539 % 92 % 58 % 74 % % 87 % 59 % 73 % 1 The loan: deposit ratio is calculated as loans and advances at amortised cost and debt securities at amortised cost divided by deposits at amortised cost. As at 31 December 2023, £224bn (2022: £224bn) of total customer deposits were insured through the UK Financial Services Compensation Scheme (FSCS) and other similar schemes. In addition to these customer deposits £5.6bn (2022: £5.7bn) of other liabilities are insured by other governments. Contractually current accounts are repayable on demand and savings accounts at short notice. In practice, their observed maturity is typically longer than their contractual maturity. Similarly, repayment profiles of certain types of assets e.g. mortgages, overdrafts and credit card lending, differ from their contractual profiles. The Group therefore assesses the behavioural maturity of both customer assets and liabilities to identify structural balance sheet funding gaps. In doing so, it applies quantitative modelling and qualitative assessments which take into account historical experience, current customer composition, and macroeconomic projections. The Group’s broad base of customers, numerically and by depositor type, helps protect against unexpected fluctuations in balances and hence provides a stable funding base for the Group’s operations and liquidity needs. Wholesale funding Barclays Bank Group and Barclays Bank UK Group maintain access to a variety of sources of wholesale funds in major currencies, including those available from term investors across a variety of distribution channels and geographies, short-term funding markets and repo markets. Barclays Bank Group has direct access to US, European and Asian capital markets through its global investment banking operations and to long-term investors through its clients worldwide. Key sources of wholesale funding include money markets, certificates of deposit, commercial paper, medium term issuances (including structured notes) and securitisations. Key sources of wholesale funding for Barclays Bank UK Group include money markets, certificates of deposit, commercial paper, covered bonds and other securitisations. The Group expects to continue issuing public wholesale debt from Barclays PLC (the Parent company), in order to maintain compliance with indicative MREL requirements and maintain a stable and diverse funding base by type, currency and market. During the year, the Group issued £14.1bn of MREL instruments from Barclays PLC in a range of different currencies and tenors. Barclays Bank PLC continued to issue in the shorter-term markets and maintain active medium-term notes programmes. Barclays Bank UK PLC continued to issue in the shorter-term markets and maintain active secured funding programmes. This funding capacity enables the respective entities to maintain their stable and diversified funding bases. As at 31 December 2023, the Group’s total wholesale funding outstanding (excluding repurchase agreements) was £176.8bn (2022: £184.0bn), of which £19.0bn (2022: £19.2bn) was secured funding and £157.8bn (2022: £164.8bn) unsecured funding. Unsecured funding includes £69.2bn (2022: £59.7bn) of privately placed senior unsecured notes issued through a variety of distribution channels including intermediaries and private banks. Wholesale funding of £58.6bn (2022: £72.5bn) matures in less than one year, representing 33% (December 2022: 39%) of total 2 . Although not a requirement, the wholesale funding outstanding. This includes £18.7bn (2022: £15.0bn) related to term funding liquidity pool exceeded the wholesale funding maturing in less than one year by £239bn (2022: £246bn). Barclays Bank Group and Barclays Bank UK Group also support various central bank monetary initiatives, such as the Bank of England’s Term Funding Scheme with additional incentives for SMEs (TFSME), and the European Central Bank’s Targeted Long-Term Refinancing Operations (TLTRO). These are reported under ‘repurchase agreements and other similar secured borrowing’ on the balance sheet. In 2023, Barclays repaid £0.9bn of its TLTRO drawings, reducing its outstanding balance to £0.5bn as at 31 December 2023. In addition, the total outstanding principal amount of TFSME remained at £21.9bn at year end. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 344 Risk performance - Treasury and Capital risk (continued) Maturity profile of wholesale funding1,2 Barclays PLC (the Parent company) Senior unsecured (Public benchmark) Senior unsecured (Privately placed) Subordinated liabilities Barclays Bank PLC (including subsidiaries) Certificates of deposit and commercial paper Asset backed commercial paper Senior unsecured (Public benchmark) 3 Senior unsecured (Privately placed) Asset backed securities Subordinated liabilities Barclays Bank UK PLC (including subsidiaries) Certificates of deposit and commercial paper Senior unsecured (Public benchmark) Covered bonds Total as at 31 December 23 Of which secured Of which unsecured Total as at 31 December 22 Of which secured Of which unsecured Notes <1 month 1-3 months 3-6 months 6-12 months <1 year 1-2 years 2-3 years 3-4 years 4-5 years >5 years £bn £bn £bn £bn £bn £bn £bn £bn £bn £bn Total £bn 1.2 — — 0.6 2.4 — 1.4 — — 1.9 — — 7.5 2.4 5.1 11.1 4.9 6.2 — — — 9.7 8.2 — 1.6 — 0.1 — — — 19.6 8.2 11.4 26.5 6.7 19.8 0.3 — — 8.6 1.0 1.0 2.9 0.1 — — — — 13.9 1.1 12.8 16.4 1.3 15.1 — — 0.4 7.5 — — 8.5 1.0 0.2 — — — 17.6 1.0 16.6 18.5 0.2 18.3 1.5 — 0.4 5.5 — — 26.4 11.6 1.0 14.4 1.1 0.3 1.9 — — 58.6 12.7 45.9 72.5 13.1 59.4 1.3 — — 12.1 1.2 0.2 — — — 20.3 1.2 19.1 22.4 1.8 20.6 9.7 — 1.5 — — — 8.4 0.5 0.3 — — — 20.4 0.5 19.9 16.9 0.7 16.2 5.9 — — — — — 5.2 — 0.1 — — 0.5 11.7 0.5 11.2 14.5 0.5 14.0 4.7 — 1.5 — — — 7.0 0.1 — — — 0.2 13.5 0.3 13.2 9.7 1.0 8.7 20.0 47.3 1.0 5.8 1.0 9.2 — — — 21.1 3.1 0.4 27.7 11.6 1.0 68.2 6.0 1.3 — 0.2 0.7 1.9 0.2 1.4 52.3 176.8 3.8 19.0 48.5 157.8 48.0 184.0 2.1 19.2 45.9 164.8 1 The composition of wholesale funds comprises the balance sheet reported financial liabilities at fair value, debt securities in issue and subordinated liabilities. It does not include participation in the central bank facilities reported within repurchase agreements and other similar secured borrowing. 2 Term funding comprises public benchmark and privately placed senior unsecured notes, covered bonds, asset-backed securities and subordinated debt where the original maturity of the instrument was more than one year. 3 Includes structured notes of £54.7bn, of which £11.5bn matures within one year. Currency composition of wholesale debt As at 31 December 2023, the proportion of wholesale funding by major currencies was as follows: Currency composition of wholesale funding Certificates of deposit and commercial paper Asset backed commercial paper Senior unsecured (Public benchmark) Senior unsecured (Privately placed) Covered bonds / Asset backed securities Subordinated liabilities Total as 31 December 2023 Total as 31 December 2022 USD % 74 83 61 55 80 72 64 61 EUR % 19 11 22 20 13 9 19 22 GBP Other % 6 6 13 5 7 17 8 11 % 1 — 4 20 — 2 9 6 To manage cross currency refinancing risk, the Group manages to currency mismatch limits, which limit risk at specific maturities. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 345 Risk performance - Treasury and Capital risk (continued) Credit ratings In addition to monitoring and managing key metrics related to the financial strength of the Group, Barclays also solicits independent credit ratings from Standard & Poor’s Global (S&P), Moody’s, Fitch, and Rating and Investment Information (R&I). These ratings assess the creditworthiness of the Group, its subsidiaries and its branches, and are based on reviews of a broad range of business and financial attributes including capital strength, profitability, funding, liquidity, asset quality, strategy and governance. Credit ratings As at 31 December 2023 Barclays Bank PLC Long term Short term Barclays Bank UK PLC Long term Short term Barclays PLC Long term Short term Standard & Poor's Moody's Fitch A+/Stable A-1 A+/Stable A-1 A1/Stable P-1 A1/Stable P-1 BBB+/Stable Baa1/Stable A-2 P-2 A+/Stable F1 A+/Stable F1 A/Stable F1 In March 2023, Moody’s upgraded Barclays PLC’s long-term rating by one notch to Baa1 and reverted the outlook to stable, reflecting Moody's expectation that the Group’s earnings will be higher, more diversified and more sustainable than before, while asset risk will remain broadly stable and capital and liquidity will remain strong. This followed the review for upgrade that had been placed on Barclays PLC in December 2022. Moody’s also revised Barclays Bank PLC’s outlook to stable from negative, reflecting Moody’s expectation that the Bank’s capital and liquidity will remain strong and whilst profitability will reduce from the exceptional levels of the last couple of years for capital markets and investment banking, it will remain sound due to improving income from other businesses and lower litigation and conduct costs. In May 2023, S&P upgraded all Barclays rated entities by one notch and reverted the outlooks to stable, reflecting S&P’s view that Barclays PLC's diversified international banking franchise has performed well against a difficult economic and financial backdrop and S&P's expectation that Barclays PLC will generate solid earnings over the next 12-24 months, even as interest rates approach their peak. This action upgraded Barclays PLC’s long-term rating to BBB+ and Barclays Bank PLC and Barclays Bank UK PLC’s long-term ratings to A+. In July 2023, Fitch affirmed all ratings for Barclays PLC, Barclays Bank PLC and Barclays Bank UK PLC. Barclays also solicits issuer ratings from R&I and the ratings of A for Barclays PLC and A+ for Barclays Bank PLC were affirmed in November 2023 with stable outlooks. A credit rating downgrade could result in outflows to meet collateral requirements on existing contracts. Outflows related to credit rating downgrades are included in the ILST stress scenarios and a portion of the liquidity pool is held against this risk. Credit ratings downgrades could also result in reduced funding capacity and increased funding costs. The contractual collateral requirement following one- and two-notch long-term and associated short-term downgrades across all credit rating agencies, would result in outflows of £1bn and £2bn respectively, and are provided for in determining an appropriate liquidity pool size given the Group’s liquidity risk appetite. These numbers do not assume any management or restructuring actions that could be taken to reduce posting requirements. These outflows do not include the potential liquidity impact from loss of unsecured funding, such as from money market funds, or loss of secured funding capacity. However, unsecured and secured funding stresses are included in the ILST stress scenarios and a portion of the liquidity pool is held against these risks. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 346 Risk performance - Treasury and Capital risk (continued) Contractual maturity of financial assets and liabilities The table below provides detail on the contractual maturity of all financial instruments and other assets and liabilities. Derivatives (other than those designated in a hedging relationship) and trading portfolio assets and liabilities are included in the ‘not more than one month' column at their fair value. Liquidity risk on these items is not managed on the basis of contractual maturity since they are not held for settlement according to such maturity and will frequently be settled before contractual maturity at fair value. Derivatives designated in a hedging relationship are included according to their contractual maturity. Contractual maturity of financial assets and liabilities (audited) As at 31 December 2023 Assets Cash and balances at central banks Cash collateral and settlement balances Loans and advances at amortised cost to banks and customers Debt securities at amortised cost Reverse repurchase agreements and other similar secured lending Trading portfolio assets Financial assets at fair value through the income statement Derivative financial instruments Financial assets at fair value through other comprehensive income Other financial assets Total financial assets Other assets Total assets Liabilities Deposits at amortised cost from banks and customers Cash collateral and settlement balances Repurchase agreements and other similar secured borrowing Debt securities in issue Subordinated liabilities Trading portfolio liabilities Financial liabilities designated at fair value Derivative financial instruments Other financial liabilities Total financial liabilities Other liabilities Total liabilities Over one month but not more than three months Over three months but not more than six months Not more than one month Over six months but not more than one year Over one year but not more than three years Over three years but not more than five years Over five years £m £m £m £m £m £m £m Total £m 224,634 — 61,837 47,052 — — — — — — — — — 224,634 — 108,889 22,457 3 5,907 4,779 9,929 16,366 579 4,700 50,126 16,626 33,340 204,622 342,747 12,113 17,949 56,749 1,435 174,605 — — — — 34 — 1,123 — — — 2 2,594 — 174,605 158,213 17,761 6,214 5,902 11,119 254,655 100 91 160 1,070 2,966 533 4,476 206,651 227 256,836 1,789 2,122 2,421 26 365 36 8,699 12,424 17,179 28,959 71,836 9 1 1 2 2,197 901,750 78,046 17,214 35,870 92,489 66,132 256,237 1,447,738 29,749 1,477,487 440,122 65,227 36,812 28,857 22,665 29,464 7,691 1,321 714 538,789 — — — — — 94,084 12,164 5,535 — 58,669 12,433 17,004 121 — 1,307 9,949 — — 247 8,279 7,092 79 7,286 17,558 12,079 27,414 584 — 1,987 1,554 6,248 — — — 41,601 96,825 10,494 58,669 180,554 31,587 13,867 14,579 23,469 13,994 19,489 297,539 249,481 6,492 21 265 — 40 24 77 82 266 64 182 372 250,044 377 7,699 1,018,244 127,100 47,828 52,261 59,332 36,286 54,693 1,395,744 9,879 1,405,623 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 347 Risk performance - Treasury and Capital risk (continued) Contractual maturity of financial assets and liabilities (audited) As at 31 December 2022 Assets Over one month but not more than three months Over three months but not more than six months Not more than one month Over six months but not more than one year Over one year but not more than three years Over three years but not more than five years Over five years £m £m £m £m £m £m £m Total £m Cash and balances at central banks 256,351 — Cash collateral and settlement balances 62,295 50,302 — — — — — — — — — 256,351 — 112,597 Loans and advances at amortised cost to banks and customers 22,581 6,644 9,104 17,663 49,259 43,551 204,490 353,292 Debt securities at amortised cost — 1,258 612 2,554 14,856 12,968 13,239 45,487 Reverse repurchase agreements and other similar secured lending Trading portfolio assets Financial assets at fair value through the income statement 442 133,813 333 — — — — — — — — — 1 776 — 133,813 158,699 21,016 6,771 6,765 11,413 3,292 5,612 213,568 Derivative financial instruments 301,679 22 66 70 462 44 37 302,380 Financial assets at fair value through other comprehensive income Other financial assets Total financial assets Other assets Total assets Liabilities Deposits at amortised cost from banks and customers Cash collateral and settlement balances Repurchase agreements and other similar secured borrowing Debt securities in issue Subordinated liabilities Trading portfolio liabilities 2,908 1,561 3,533 4,535 3,082 16,766 16,418 17,820 65,062 49 — 43 — 1 2 1,656 940,329 83,157 21,088 30,177 92,756 76,274 241,201 1,484,982 477,022 68,930 29,790 27,997 19,388 13,665 4,590 — — — — 943 6,139 399 9,419 9,621 — 72,924 23,488 13,259 11,876 16,252 17 — — — 262 — 1,181 — 28,717 1,513,699 499 — 10,069 14,808 1,987 — 828 545,782 — 96,927 83 27,052 23,577 112,881 7,976 — 11,423 72,924 Financial liabilities designated at fair value 171,096 26,481 14,352 9,104 24,548 8,528 17,528 271,637 Derivative financial instruments Other financial liabilities Total financial liabilities Other liabilities Total liabilities 288,582 7,841 36 48 63 43 7 84 262 409 273 247 397 289,620 484 9,156 1,105,435 108,256 47,105 35,941 53,381 36,411 50,873 1,437,402 7,037 1,444,439 Expected maturity date may differ from the contractual dates, to account for: • trading portfolio assets and liabilities and derivative financial instruments, which may not be held to maturity as part of the Group’s trading strategies • corporate and retail deposits, reported under deposits at amortised cost, are repayable on demand or at short notice on a contractual basis. In practice, their behavioural maturity is typically longer than their contractual maturity, and therefore these deposits provide stable funding for the Group’s operations and liquidity needs because of the broad base of customers, both numerically and by depositor type • loans to corporate and retail customers, which are included within loans and advances at amortised cost and financial assets at fair value, may be repaid earlier in line with terms and conditions of the contract • debt securities in issue, subordinated liabilities, and financial liabilities designated at fair value, may include early redemption features. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 348 Risk performance - Treasury and Capital risk (continued) Contractual maturity of financial liabilities on an undiscounted basis The table below presents the cash flows payable by the Group under financial liabilities by remaining contractual maturities at the balance sheet date. The amounts disclosed in the table are the contractual undiscounted cash flows of all financial liabilities (i.e. nominal values). The balances in the below table do not agree directly to the balances in the consolidated balance sheet as the table incorporates all cash flows, on an undiscounted basis, related to both principal as well as those associated with all future coupon payments. Derivative financial instruments held for trading and trading portfolio liabilities are included in the 'not more than one month' column at their fair value. Contractual maturity of financial liabilities - undiscounted (audited) As at 31 December 2023 Deposits at amortised cost from banks and customers Cash collateral and settlement balances Repurchase agreements and other similar secured borrowing Debt securities in issue Subordinated liabilities Trading portfolio liabilities Financial liabilities designated at fair value Derivative financial instruments Other financial liabilities Total financial liabilities As at 31 December 2022 Deposits at amortised cost from banks and customers Cash collateral and settlement balances Repurchase agreements and other similar secured borrowing Debt securities in issue Subordinated liabilities Trading portfolio liabilities Over one month but not more than three months Over three months but not more than six months Not more than one month Over six months but not more than one year Over one year but not more than three years Over three years but not more than five years Over five years £m £m £m £m £m £m £m Total £m 440,184 65,230 37,101 29,096 23,055 30,377 8,107 1,540 882 541,246 — — — — — 94,326 12,196 5,546 — 58,669 12,516 17,142 1,326 10,121 252 9,042 7,902 213 43,447 7,481 18,674 13,688 40,154 112,806 121 — — — 601 — 2,241 1,822 8,594 — — — 13,379 58,669 180,687 31,794 14,174 15,013 24,891 15,309 34,035 315,903 249,482 6,492 21 269 — 45 24 89 90 309 75 220 705 250,397 615 8,039 1,018,486 128,060 48,721 53,837 63,354 40,556 85,198 1,438,212 477,050 68,930 29,921 28,185 19,393 13,798 4,606 — — — — 946 6,920 401 23,580 13,375 12,165 16,964 499 — 1,082 546,349 — 97,115 12,234 16,790 252 30,183 34,078 126,598 17 — — — 263 — 1,274 2,356 10,331 — — — 14,241 72,924 9,430 9,646 — 72,924 Financial liabilities designated at fair value 171,296 26,674 14,905 9,399 25,662 9,847 33,099 290,882 Derivative financial instruments Other financial liabilities Total financial liabilities 288,582 7,841 98 58 101 56 8 109 290 488 321 308 793 290,193 564 9,424 1,105,699 108,934 47,830 36,688 56,204 42,355 80,199 1,477,909 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 349 Risk performance - Treasury and Capital risk (continued) Maturity of off-balance sheet commitments given The table below presents the maturity split of the Group’s off-balance sheet commitments given at the balance sheet date. The amounts disclosed in the table are the undiscounted cash flows (i.e. nominal values) on the basis of earliest opportunity at which they are available. Maturity analysis of off-balance sheet commitments given (audited) Not more than one month Over one month but not more than three months Over three months but not more than six months Over six months but not more than one year Over one year but not more than three years Over three years but not more than five years Over five years £m £m £m £m £m £m £m Total £m As at 31 December 2023 Contingent liabilities and financial guarantees Documentary credits and other short- term trade related transactions Standby facilities, credit lines and other commitments Total off-balance sheet commitments given As at 31 December 2022 Contingent liabilities and financial guarantees Documentary credits and other short- term trade related transactions Standby facilities, credit lines and other commitments Total off-balance sheet commitments given 25,217 119 2,348 388,030 3 — 415,595 122 24,118 1,742 393,723 419,583 71 1 — 72 2 1 — 3 14 5 — 19 1 — — 1 1 — — 1 1 — 55 56 1 — 37 38 — — — — — — — — — 25,340 — 2,352 — 388,085 — 415,777 — 24,205 — 1,748 — 393,760 — 419,713 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 350 Risk performance - Treasury and Capital risk (continued) Capital risk All disclosures in this section are unaudited unless otherwise stated. Overview The CET1 ratio, among other metrics, is a measure of the capital strength and resilience of Barclays. Maintenance of our capital resources is vital in order to meet the overall regulatory capital requirement, to withstand the impact of the risks that may arise under normal and stressed conditions, and maintain adequate capital to cover current and forecast business needs and associated risks to provide a viable and sustainable business offering. This section provides an overview of the Group’s: (i) CET1 capital, leverage and own funds and eligible liabilities requirements; (ii) capital resources; (iii) risk weighted assets (RWAs); (iv) leverage ratios and exposures; and (v) own funds and eligible liabilities. More details on monitoring and managing capital risk may be found in the risk management sections of the Barclays PLC Pillar 3 Report 2023 (unaudited). Key metrics Common Equity Tier 1 ratio 13.8% UK leverage ratio 5.2% Own funds and eligible liabilities ratio as a percentage of RWAs 33.6% Summary of performance in the period The Group continues to be in excess of overall capital, leverage and MREL regulatory requirements. The CET1 ratio decreased to 13.8% (December 2022: 13.9%) as RWAs increased by £6.2bn to £342.7bn partially offset by an increase in CET1 capital of £0.4bn to £47.3bn ▪ c.125bps increase from 2023 attributable profit, including the c.25bps negative impact of structural cost actions, of which c.10bps are offset in other capital movements ▪ c.70bps decrease driven by returns to shareholders including the 8p per share total dividend and £1.25bn of share buybacks announced with FY22 and H123 results ▪ c.10bps decrease from other capital movements, including the impact of regulatory change on 1 January 2023 relating to IFRS 9 transitional relief, the impact of the KMC acquisition, and movements in other regulatory capital deductions ▪ c.50bps decrease as a result of a £13.2bn increase in RWAs excluding the impact of foreign exchange movements, primarily driven by higher CIB and CC&P RWAs ▪ An £8.2bn decrease in RWAs as a result of foreign exchange movements was offset by a £1.1bn decrease in CET1 capital due to a decrease in the currency translation reserve The UK leverage ratio decreased to 5.2% (December 2022: 5.3%) primarily due to a £38.3bn increase in leverage exposure to £1,168.3bn, largely driven by an increase in trading portfolio assets within Global Markets Minimum capital requirements The Group’s Overall Capital Requirement for CET1 increased to 12.0%, following the latest PRA Individual Capital Requirement (ICR) notice and comprises a 4.5% Pillar 1 minimum, a 2.5% Capital Conservation Buffer (CCB), a 1.5% Global Systemically Important Institution (G-SII) buffer, a 2.6% Pillar 2A requirement and a 0.9% Countercyclical Capital Buffer (CCyB). The Group’s CCyB is based on the buffer rate applicable for each jurisdiction in which the Group has exposures. Following the Financial Policy Committee (FPC) announcement on 5 July 2022, the UK CCyB increased from 1% to 2% with effect from 5 July 2023. The buffer rates set by other national authorities for non-UK exposures are not currently material. The Group’s updated Pillar 2A requirement increased by 25bps to 4.6% of which at least 56.25% needs to be met with CET1 capital, equating to 2.6% of RWAs. The Pillar 2A requirement, based on a point in time assessment, has been set as a proportion of RWAs and is subject to at least annual review. The Group’s CET1 target ratio of 13-14% takes into account headroom above requirements which includes a confidential institution-specific PRA buffer. The Group remains above its minimum capital regulatory requirements including the PRA buffer. Minimum leverage requirements The Group is subject to a UK leverage ratio requirement of 4.1% as at 31 December 2023. This comprises the 3.25% minimum requirement, a G-SII additional leverage ratio buffer (G-SII ALRB) of 0.53% and a countercyclical leverage ratio buffer (CCLB) of 0.3%. The Group is also required to disclose an average UK leverage ratio which is based on capital on the last day of each month in the quarter and an exposure measure for each day in the quarter. Minimum requirements for own funds and eligible liabilities The Group is required to meet the higher of: (i) two times the sum of 8% Pillar 1 and 4.6% Pillar 2A equating to 25.2% of RWAs; and (ii) 6.75% of leverage exposures. In addition, the higher of regulatory capital and leverage buffers apply. CET1 capital cannot be counted towards both MREL and the buffers, meaning that the buffers, including the above mentioned confidential institution-specific PRA buffer, will effectively be applied above MREL requirements. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 351 Risk performance - Treasury and Capital risk (continued) Capital resources Capital ratios1, 2 As at 31 December CET1 Tier 1 (T1) Total regulatory capital MREL ratio as a percentage of total RWAs Own funds and eligible liabilities (audited) As at 31 December Total equity excluding non-controlling interests per the balance sheet Less: other equity instruments (recognised as AT1 capital) Adjustment to retained earnings for foreseeable ordinary share dividends Adjustment to retained earnings for foreseeable other equity coupons Other regulatory adjustments and deductions Additional value adjustments (PVA) Goodwill and intangible assets Deferred tax assets that rely on future profitability excluding temporary differences Fair value reserves related to gains or losses on cash flow hedges Excess of expected losses over impairment Gains or losses on liabilities at fair value resulting from own credit Defined benefit pension fund assets Direct and indirect holdings by an institution of own CET1 instruments Adjustment under IFRS 9 transitional arrangements Other regulatory adjustments CET1 capital AT1 capital Capital instruments and related share premium accounts Other regulatory adjustments and deductions AT1 capital T1 capital T2 capital Capital instruments and related share premium accounts Qualifying T2 capital (including minority interests) issued by subsidiaries Credit risk adjustments (excess of impairment over expected losses) Other regulatory adjustments and deductions Total regulatory capital Less : Ineligible T2 capital (including minority interests) issued by subsidiaries Eligible liabilities Total own funds and eligible liabilities3 Total RWAs (Unaudited) Notes 2023 13.8 % 17.7 % 20.1 % 33.6 % 2023 £m 71,204 (13,259) (795) (43) (1,901) (7,790) (1,630) 3,707 (296) 136 (2,654) (20) 288 357 47,304 13,263 (60) 13,203 60,507 7,966 569 — (160) 68,882 (569) 46,995 2022 13.9 % 17.9 % 20.8 % 33.5 % 2022 £m 68,292 (13,284) (787) (37) (1,726) (8,224) (1,500) 7,237 (119) (620) (3,430) (20) 700 396 46,878 13,284 (60) 13,224 60,102 9,000 1,095 35 (160) 70,072 (1,095) 43,851 115,308 342,717 112,828 336,518 1 CET1, T1 and T2 capital, and RWAs are calculated applying the transitional arrangements of the CRR as amended by CRR II. This includes IFRS 9 transitional arrangements and the grandfathering of CRR II non-compliant capital instruments. 2 The fully loaded CET1 ratio, as is relevant for assessing against the conversion trigger in Barclays PLC AT1 securities, was 13.7%, with £47.0bn of CET1 capital and £342.7bn of RWAs calculated without applying the transitional arrangements of the CRR as amended by CRR II. 3 As at 31 December 2023, the Group's MREL requirement, excluding the PRA buffer, was to hold £103.0bn of own funds and eligible liabilities equating to 30.1% of RWAs. The Group remains above its MREL regulatory requirement including the PRA buffer. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 352 Risk performance - Treasury and Capital risk (continued) Movement in CET1 capital Opening balance as at 1 January Profit for the period attributable to equity holders Own credit relating to derivative liabilities Ordinary share dividends paid and foreseen Purchased and foreseeable share repurchase Other equity coupons paid and foreseen Increase in retained regulatory capital generated from earnings Net impact of share schemes Fair value through other comprehensive income reserve Currency translation reserve Other reserves Decrease in other qualifying reserves Pension remeasurements within reserves Defined benefit pension fund asset deduction Net impact of pensions Additional value adjustments (PVA) Goodwill and intangible assets Deferred tax assets that rely on future profitability excluding those arising from temporary differences Excess of expected loss over impairment Adjustment under IFRS 9 transitional arrangements Other regulatory adjustments Decrease in regulatory capital due to adjustments and deductions Closing balance as at 31 December 2023 £m 46,878 5,259 49 (1,218) (1,250) (991) 1,849 104 194 (1,101) (42) (845) (855) 776 (79) (175) 434 (130) (177) (412) (39) (499) 47,304 CET1 capital increased £0.4bn to £47.3bn (December 2022: £46.9bn). £5.3bn of capital generated from profit, including the impacts of structural cost actions, was partially offset by distributions of £3.5bn comprising: • £1.25bn of share buybacks announced with FY22 and H123 results • £1.2bn of ordinary share dividend paid and foreseen reflecting £0.4bn interim dividend paid and a £0.8bn accrual towards the FY23 dividend • £1.0bn of equity coupons paid and foreseen Other significant movements in the period were: • £1.1bn decrease in the currency translation reserve driven by the strengthening of GBP against USD • £0.4bn decrease in IFRS 9 transitional relief primarily due to the relief applied to the pre-2020 impairment charge reducing to 0% in 2023 from 25% in 2022 and the relief applied to the post-2020 impairment charge reducing to 50% in 2023 from 75% in 2022 • £0.2bn increase in PVA, which includes an increase for price uncertainty within corporate loans, including the leveraged finance loan portfolio • £0.4bn increase primarily driven by intangible impairment structural cost actions. The impact of this was capital neutral with the offsetting decrease within attributable profit. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 353 Risk performance - Treasury and Capital risk (continued) Risk weighted assets Risk weighted assets (RWAs) by risk type and business Credit risk1 Std IRB Std Counterparty credit risk Settlement risk IRB Market risk Operational risk Total RWAs CVA Std IMA As at 31 December 2023 Barclays UK Corporate and Investment Bank Consumer, Cards and Payments Barclays International Head Office Barclays Group As at 31 December 2022 Barclays UK Corporate and Investment Bank Consumer, Cards and Payments Barclays International Head Office Barclays Group Note £m 10,472 40,315 28,218 68,533 3,881 82,886 £m 50,761 65,499 5,515 71,014 6,963 128,738 £m 178 18,775 182 18,957 — 19,135 £m — 22,033 55 22,088 — 22,088 £m — 159 — 159 — 159 £m 94 3,260 38 3,298 — 3,392 £m 274 14,625 2 14,627 — 14,901 £m — 25,222 638 25,860 — 25,860 6,836 35,738 27,882 63,620 2,636 73,092 54,752 75,413 3,773 79,186 6,843 140,781 167 16,814 214 17,028 — 17,195 — 21,449 46 21,495 — 21,495 — 80 — 80 — 80 72 3,093 61 3,154 — 3,226 233 13,716 — 13,716 — 13,949 — 22,497 388 22,885 — 22,885 1 In Q323 credit risk RWAs of £9.8bn relating to deferred tax assets were reclassified from IRB to STD with no impact to total RWAs. Movement analysis of risk weighted assets £m 11,715 26,887 7,631 34,518 £m 73,494 216,775 42,279 259,054 (675) 10,169 342,717 45,558 11,023 27,064 6,559 33,623 (831) 43,815 73,083 215,864 38,923 254,787 8,648 336,518 Risk weighted assets As at 31 December 2022 Book size Acquisitions and disposals Book quality Model updates Methodology and policy 1 Foreign exchange movement Total RWA movements As at 31 December 2023 Note Credit risk £m 213,873 (1,338) 688 1,512 (2,600) 5,175 (5,686) (2,249) 211,624 Counterparty credit risk Market risk Operational risk Total RWAs £m 41,996 2,122 — (136) — 2,700 (1,908) 2,778 44,774 £m 36,834 3,325 — — 1,200 — (598) 3,927 40,761 £m 43,815 1,743 — — — — — 1,743 45,558 £m 336,518 5,852 688 1,376 (1,400) 7,875 (8,192) 6,199 342,717 1 Foreign exchange movements does not include impact of foreign exchange for modelled market risk or operational risk. Overall RWAs increased £6.2bn to £342.7bn (December 2022: £336.5bn). Credit risk RWAs decreased £2.2bn: • A £1.3bn decrease in book size within CIB and mortgages within Barclays UK, partially offset by higher credit card balances within CC&P • A £1.5bn increase in book quality RWAs primarily driven by changes in risk parameters and HPI refresh within Barclays UK • A £2.6bn decrease in model updates primarily driven by capital LGD model update for the mortgage portfolio to reflect the significant decrease in repossession volume during and post the COVID pandemic • A £5.2bn increase in methodology and policy primarily driven by the recalibration of the post model adjustment (PMA) introduced to address the IRB roadmap changes and a change in treatment of non-credit obligation exposures • A £5.7bn decrease as a result of foreign exchange movements primarily due to the strengthening of GBP against USD Counterparty Credit risk RWAs increased £2.8bn: • A £2.1bn increase in book size primarily due to increased trading activity within CIB • A £2.7bn increase in methodology and policy due to a recalibration of the PMA introduced to address the IRB roadmap changes and a change in treatment of certain securities financing transactions collateral • A £1.9bn decrease as a result of foreign exchange movements primarily due to the strengthening of GBP against USD Market risk RWAs increased £3.9bn: • A £3.3bn increase in book size primarily due to increased trading activity within CIB • A £1.2bn increase in model updates to capture incremental risk arising from Stressed Value at Risk (SVaR), measured on a 10-day basis Operational risk RWAs increase £1.7bn: • A £1.7bn increase in book size primarily driven by the inclusion of higher 2023 CC&P and Barclays UK income compared to 2020 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 354 Risk performance - Treasury and Capital risk (continued) Leverage ratios and exposures The Group is required to disclose a UK leverage ratio based on capital and exposure on the last day of the quarter. The Group is also required to disclose an average UK leverage ratio which is based on capital on the last day of each month in the quarter and an exposure measure for each day in the quarter. Leverage ratios1,2 As at 31 December 3 UK leverage ratio T1 capital UK leverage exposure Average UK leverage ratio Average T1 capital Average UK leverage exposure Notes 2023 £m 5.2 % 60,507 1,168,275 4.8 % 60,343 1,266,880 2022 £m 5.3 % 60,102 1,129,973 4.8 % 60,865 1,280,972 1 Capital and leverage measures are calculated applying the transitional arrangements of the CRR as amended by CRR II. 2 Fully loaded UK leverage ratio was 5.2%, with £60.2bn of T1 capital and £1,168.0bn of leverage exposure. Fully loaded average UK leverage ratio was 4.7% with £60.0bn of T1 capital and £1,266.6bn of leverage exposure. Fully loaded UK leverage ratios are calculated without applying the transitional arrangements of the CRR as amended by CRR II. 3 Although the leverage ratio is expressed in terms of T1 capital, the leverage ratio buffers and 75% of the minimum requirement must be covered solely with CET1 capital. The CET1 capital held against the 0.53% G-SII ALRB was £6.1bn and against the 0.3% CCLB was £3.5bn The UK leverage ratio decreased to 5.2% (December 2022: 5.3%) primarily due to a £38.3bn increase in leverage exposure to £1,168.3bn, largely driven by an increase in trading portfolio assets within Global Markets. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 355 Risk performance - Treasury and Capital risk (continued) Foreign exchange risk (audited) The Group is exposed to two sources of foreign exchange risk. a) Transactional foreign currency exposure Transactional foreign currency exposures represent exposure on banking assets and liabilities, denominated in currencies other than the functional currency of the transacting entity. The Group’s risk management policies are designed to prevent the holding of significant open positions in foreign currencies outside the trading portfolio managed by Barclays International which is monitored through VaR. Banking book transactional foreign exchange risk outside of Barclays International is monitored on a daily basis by the market risk function and minimised by the businesses. b) Translational foreign exchange exposure The Group’s investments in overseas subsidiaries and branches create capital resources denominated in foreign currencies, principally USD and EUR. Changes in the GBP value of the net investments due to foreign currency movements are captured in the currency translation reserve, resulting in a movement in CET1 capital. The Group’s strategy is to minimise the volatility of the capital ratios caused by foreign exchange movements, by matching the CET1 capital movements to the revaluation of the Group’s foreign currency RWA exposures. Functional currency of operations (audited) 31 December 2023 USD EUR JPY Other currencies Total 31 December 2022 USD EUR JPY Other currencies Total Foreign currency net investments Borrowings which hedge the net investments Derivatives which hedge the net investments Structural currency exposures pre- economic hedges Economic hedges Remaining structural currency exposures £m £m £m £m £m £m 26,524 9,868 646 3,329 (7,308) (5,603) (174) (72) 40,367 (13,157) (2,179) 17,037 — — (1,565) (3,744) 4,265 472 1,692 23,466 27,441 9,776 689 3,330 (7,363) (5,461) — — 41,236 (12,824) (2,086) 17,992 (3) (197) (1,676) (3,962) 4,312 492 1,654 24,450 (7,326) (276) — (505) (8,107) (8,688) (283) — (279) (9,250) 9,711 3,989 472 1,187 15,359 9,304 4,029 492 1,375 15,200 Economic hedges relate to exposures arising on foreign currency denominated preference share and AT1 instruments. These are accounted for at historical cost under IFRS and do not qualify as hedges for accounting purposes. The gain or loss arising from changes in the GBP value of these instruments is recognised on redemption in retained earnings. During 2023, total structural currency exposure net of hedging instruments increased by £0.2bn to £15.4bn (2022: £15.2bn). Foreign currency net investments decreased by £0.8bn to £40.4bn (2022: £41.2bn) driven predominantly by a £0.9bn decrease in USD, offset by £0.1bn increase in EUR. The hedges (excluding economic hedges) associated with these investments increased by £0.1bn to £16.9bn (2022: £16.8bn). Pension risk review The UK Retirement Fund (UKRF) represents approximately 96% (2022: 96%) of the Group’s total retirement benefit obligations globally. As such this risk review section focuses exclusively on the UKRF. The UKRF is closed to new entrants and there is no new final salary benefit being accrued. Existing active members accrue a combination of a cash balance benefit and a defined contribution element. Pension risk arises as the market value of the pension fund assets may decline, investment returns may reduce or the estimated value of the pension liabilities may increase. Refer to the Management of pension risk section in the Barclays PLC Pillar 3 Report 2023 (unaudited) for more information on how pension risk is managed. Assets The Trustee Board of the UKRF defines its overall long-term investment strategy with investments across a broad range of asset classes. This results in a diversified mix of return seeking assets as well as liability matching assets to better match future pension obligations. The two largest risks within the asset portfolio are credit spread and growth assets. The split of scheme assets is shown within Note 32 to the financial statements. The fair value of the UKRF assets was £24.2bn as at 31 December 2023 (2022: £24.7bn). Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 356 Risk performance - Treasury and Capital risk (continued) Liabilities The UKRF retirement benefit obligations are a series of future cash flows with relatively long duration. On an IAS 19 basis these cash flows are sensitive to changes in the expected long-term price inflation rate (RPI) and the discount rate (GBP AA corporate bond yield): • An increase in long-term expected inflation corresponds to an increase in liabilities; • A decrease in the discount rate corresponds to an increase in liabilities. Pension risk is generated through the Group’s defined benefit schemes and this risk is set to reduce over time as the main defined benefit scheme is closed to new entrants. The chart below outlines the shape of the UKRF’s liability cash flow profile as at 31 December 2023 that takes account of the future inflation indexing of payments to beneficiaries. The majority of the cash flows (approximately 96%) fall between 0 and 40 years, peaking between 11 and 20 years and reducing thereafter. The shape may vary depending on changes to inflation and longevity expectations and any members who elect to transfer out. Transfers out will bring forward the liability cash flows. For more detail on the UKRF’s financial and demographic assumptions, see Note 32 to the financial statements. Proportion of liability cash flows Net IAS 19 position (%) (£bn) n 0-10 years n 11-20 years n 21-30 years n 31-40 years n 41-50 years n 51+ years 30.7 32.6 22.2 11 3.3 0.3 6 5 4 3 2 1 0 The graph above shows the evolution of the UKRF’s net IAS 19 position over the last two years. During 2023 the decrease in the UKRF surplus was driven by assets underperforming the discount rate and lower corporate bond yields. Refer to Note 32 to the financial statements for the sensitivity of the UKRF to changes in key assumptions. Risk measurement In line with Barclays’ risk management framework the assets and liabilities of the UKRF are modelled within a VaR framework to show the volatility of the pension position at a total portfolio level. This enables the risks, diversification and liability matching characteristics of the UKRF obligations and investments to be adequately captured. VaR is measured and monitored on a monthly basis. Risks are reviewed and reported regularly at the Pensions Executive Board. The VaR model takes into account the valuation of the liabilities on an IAS 19 basis (see Note 32 to the financial statements). The Trustee receives quarterly VaR measures on a funding basis. The pension liability is also sensitive to post-retirement mortality assumptions which are reviewed regularly (See Note 32 to the financial statements). To mitigate part of this risk the UKRF has entered into longevity reinsurance contracts approximately three quarters of current pensioner liabilities. In addition, the impact of pension risk to the Group is taken into account as part of the stress testing process. Stress testing is performed internally on at least an annual basis. The UKRF exposure is also included as part of regulatory stress tests. Barclays defined benefit pension schemes affects capital in two ways: • An IAS 19 deficit is treated as a liability on the Group’s balance sheet. Movement in a deficit due to remeasurements, including actuarial losses, are recognised immediately through Other Comprehensive Income and as such reduces shareholders’ equity and CET1 capital. An IAS 19 surplus is treated as an asset on the balance sheet and increases shareholders’ equity; however, it is deducted for the purposes of determining CET1 capital. • In the Group’s statutory balance sheet an IAS 19 surplus or deficit is partially offset by a deferred tax liability or asset respectively. These may or may not be recognised for calculating CET1 capital depending on the overall deferred tax position of the Group at the particular time. Pension risk is taken into account in the Pillar 2A capital assessment undertaken by the PRA at least annually. The Pillar 2A requirement forms part of the overall capital requirement for the Group. 3.8bn4.7bn3.6bnDec 2021Dec 2022Dec 2023 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 357 Risk performance - Treasury and Capital risk (continued) Net interest income sensitivity The table below shows a sensitivity analysis on pre-tax net interest income for non-traded financial assets and liabilities, including the effect of any hedging. This analysis is not a forward guidance on NII and is intended as a quantification of risk exposure utilising the Net Interest Income (NII) metric as described on page 177 of the Barclays PLC Pillar 3 Report 2023 (unaudited), which includes documentation of the main model assumptions. Interest rate risk in the banking book Key metrics All disclosures in this section are unaudited unless otherwise stated. Overview The treasury and capital risk framework covers interest rate sensitive exposures held in the banking book, mostly relating to accrual accounted and FVOCI instruments. The potential volatility of net interest income is measured by an Annual Earnings at Risk (AEaR) metric which is monitored regularly and reported to senior management and the Barclays PLC Board Risk Committee as part of the limit monitoring framework. For further detail on the interest rate risk in the banking book governance and framework refer to page 177 of the Barclays PLC Pillar 3 Report 2023 (unaudited). AEaR -£57m AEaR across the Group from a -25bps Shock to forward interest rate curves. Summary of performance in the period NII sensitivity to interest rate shocks has decreased year on year due to changes in the customer banking book's composition. NII sensitivity asymmetry is due to the timing impact of customer rate changes following a rate shock and is also impacted by changes in balance sheet composition. Net interest income sensitivity (AEaR) by business unit (audited) As at 31 December 2023 +25bps -25bps 2022 +25bps -25bps Note Barclays UK £m 45 (78) 15 (59) Barclays International £m (8) 5 25 (29) Head Office £m (16) 16 (15) 15 Total £m 21 (57) 25 (73) The Group’s customer banking book hedging activity is risk reducing from an NII sensitivity perspective. The hedges in place remove interest rate risk and smooth income over the medium term. The NII sensitivity for the Group at 31 December 2023 without hedging in place for +/-25bp rate shocks would be £184m/£(220)m respectively. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 358 Risk performance - Treasury and Capital risk (continued) Net interest income sensitivity (AEaR) by currency (audited) As at 31 December GBP USD EUR Other currencies Total Analysis of equity sensitivity 2023 2022 +25 basis points -25 basis points +25 basis points -25 basis points £m (1) 17 20 (15) 21 £m (33) (18) (21) 15 (57) £m (6) 43 3 (15) 25 £m (40) (45) (4) 16 (73) Equity sensitivity measures the overall impact of a +/-25bps movement in interest rates on retained earnings, FVOCI, cash flow hedge reserves and pensions. For non-NII items a DV01 metric is used, which is an indicator of the shift in value for a 1bp movement in the yield curve. Analysis of equity sensitivity (audited) As at 31 December Net interest income Taxation effects on the above Effect on profit for the year As percentage of net profit after tax Effect on profit for the year (per above) Fair value through other comprehensive income reserve Cash flow hedge reserve Taxation effects on the above Effect on equity As percentage of equity 2023 +25 basis points £m 21 (5) 16 -25 basis points £m (57) 13 (44) 2022 +25 basis points £m 25 (5) 20 -25 basis points £m (73) 15 (58) 0.3% (0.8%) 0.3% (1.0%) 16 (246) (744) 228 (746) (1.0%) (44) 254 744 (230) 724 1.0% 20 (291) (774) 288 (757) (1.1%) (58) 302 774 (291) 727 1.0% Movements in the FVOCI reserve impact CET1 capital. However, movements in the cash flow hedge reserve and pensions remeasurement reserve recognised in FVOCI do not affect CET1 capital. Volatility of the FVOCI portfolio in the liquidity pool Changes in value of FVOCI exposures flow directly through capital via the FVOCI reserve. The volatility of the value of the FVOCI investments in the liquidity pool is captured and managed through a value measure rather than an earning measure, i.e. non-traded market risk VaR. Although the underlying methodology to calculate the non-traded VaR is identical to the one used in traded management VaR, the two measures are not directly comparable. The non-traded VaR represents the volatility to capital driven by the FVOCI exposures. These exposures are in the banking book and do not meet the criteria for trading book treatment. Analysis of volatility of the FVOCI portfolio in the liquidity pool For the year ended 31 December Non-traded market value at risk (daily, 95%) Average £m 76 2023 High £m 90 Low £m 61 Average £m 48 2022 High £m 62 Low £m 35 Daily Value at Risk has trended upwards in H1 2023 due to increase in time series volatility and addition in interest rate risk positioning. Daily Value at Risk reduced towards the end of H2 2023 as time series volatility subsided. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 359 Risk performance - Operational risk Summary of performance in the period 1 During 2023, total operational risk losses reduced to £141m (2022: £161m) while the number of recorded events for 2023 (2,914) remained broadly in line with the level for 2022 (2,964). The total operational risk losses for the year were mainly driven by events falling within the Execution, Delivery & Process Management and External Fraud categories, which tend to be high volume but low impact events. Operational risk profile Within operational risk, there are a large number of smaller value risk events. In 2023, 83% (2022: 84%) of the Group’s reportable operational risk events by volume had a value of less than £50,000 each. Cumulatively, events under this £50,000 threshold accounted for only 33% (2022: 32%) of the Group’s total net operational risk losses. A small proportion of operational risk events have a material impact on the financial results of the Group. Operational risk All disclosures in this section are unaudited unless otherwise stated. Overview Key metrics 83% of the Group’s net reportable operational risk events had a loss value of £50,000 or less 85% of events by number are due to External Fraud 56% of losses are from events aligned to External Fraud 40% of losses are from events aligned to Execution, Delivery and Process Management Operational risks are inherent in the Group’s business activities and it is not cost effective or possible to attempt to eliminate all operational risks. The Operational Risk Framework is therefore focused on identifying operational risks, assessing them and managing them within the Group’s approved risk appetite. The Operational Risk principal risk comprises the following risks: Change Delivery Management Risk; Data Management Risk; Financial Reporting Risk; Fraud Risk; Information Security Risk; Operational Recovery Planning Risk; Payments Process Risk; People Risk; Physical Security Risk; Premises Risk; Risk Reporting; Supplier Risk; Tax Risk; Technology Risk and Transaction Operations Risk. The operational risk profile is also informed by a number of connected risks: Cybersecurity, Data, and Resilience. These themes represent threats to the Group that extend across multiple risk types, and therefore require an integrated risk management approach. For definitions of these risks refer to pages 181 to 183 of the Barclays PLC Pillar 3 Report 2023. To provide complete coverage of the potential adverse impacts on the Group arising from operational risk, the operational risk taxonomy extends beyond the risks listed above to cover operational risks associated with other principal risks too. This section provides an analysis of the Group’s operational risk profile, including events above the Group’s reportable threshold, which have had a financial impact in 2023. The Group’s operational risk profile is informed by bottom-up risk assessments undertaken by each business unit and top-down qualitative review for each risk type. Fraud, Transaction Operations, Information Security and Technology continue to be highlighted as key operational risk exposures. For information on compliance risk events, see the compliance risk section. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 360 Risk performance - Operational risk (continued) The analysis below presents the Group’s operational risk events by Basel event category: Operational risk events by BASEL event category1 % of total risk events by count % of total risk events by value Internal fraud Internal fraud 2023 2022 External fraud 2023 2022 2023 2022 0.4 0.4 External fraud 2023 2022 Execution delivery and process management Execution delivery and process management 2023 2022 2023 2022 Employment practices and workplace safety Employment practices and workplace safety 2023 2022 2023 2022 Damage to physical assets Damage to physical assets 2023 2022 2023 2022 Clients, products and business practices Clients, products and business practices 2023 2022 2023 2022 Business disruption and system failures Business disruption and system failures 2023 2022 Note 2023 2022 1 The data disclosed includes operational risk losses for reportable events impacting the Barclays Group business areas, having impact of > £10,000 and excludes events that are compliance or legal risk, aggregate and boundary events. A boundary event is an operational risk event that results in a credit risk impact. Due to the nature of risk events that keep evolving, prior year losses are updated. • External Fraud remains the category with the highest frequency of events at 85% of total events in 2023 (2022: 86%). Impacts from events arising from External Fraud increased slightly in 2023 to £79m (2022: £76m) and accounted for 56% of total 2023 losses (2022: 47%). In this category, high volume, low value events are driven by transactional fraud often related to debit and credit card usage. Note: total External Fraud losses in 2023 including those from events with impact <£10,000 amounted to £183m (2022: £190m). • Execution, Delivery and Process Management impacts decreased to £56m (2022: £83m) and accounted for 40% (2022: 52%) of total operational risk losses. The events in this category are typical of the banking industry as a whole where high volumes of transactions are processed on a daily basis, mapping mainly to Barclays Transaction Operations risk type. The overall frequency of events in this category remained stable at 14% of total events by volume (2022: 14%). Investment continues to be made in improving the control environment across the Group. Specific areas of focus include new and enhanced fraud prevention systems and tools to combat the increasing level of fraud attempts being made whilst minimising disruption to genuine transactions. Fraud remains an industry wide threat and the Group continues to work closely with external partners on various prevention initiatives. Additionally, the Group continues to invest in its processing infrastructure to manage the risk of processing errors as well as ensuring scalability of operations. Operational Resilience remains a key area of focus for the Group, having been reinforced in recent years due to potential operational disruption from the COVID-19 pandemic. The Group continues to strengthen its resilience approach across its most important business services to improve recoverability and assurance thereof by reviewing scenarios based on current global climates. Operational risk associated with cybersecurity remains a top focus for the Group. The sophistication of threat actors continues to grow as noted by multiple external risk events observed throughout the year. Ransomware attacks across the global Barclays supplier base were observed and we worked closely with the affected suppliers to manage potential impacts to the Group and its clients and customers. The Group’s cybersecurity events were managed within its risk tolerances, and cybersecurity incidents did not materially impact the Group's business strategy, results of operations, or financial condition. For further information, refer to the operational risk management section. 0.20.285.185.914.113.60.100.20.10.100.20.25647.439.751.6001.80.20.90.11.20.2Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 361 Risk performance - Model risk, Compliance risk, Reputation risk and Legal risk Model risk, Compliance risk, Reputation risk and Legal risk All disclosures in this section are unaudited unless otherwise stated. Compliance risk Model risk Barclays is committed to continuously improving model risk management and made a number of enhancements in 2023, including: • Continued improvements to the transparency and oversight of model risk through further upgrades to model risk governance structure. • Continued enhancements to model risk policy and standards to ensure comprehensiveness, consistency and cohesiveness of the model risk framework. • Continued focus on improving the model risk control framework . • Enhanced the Group Model Risk Appetite Statement, incorporating model quality and uncertainty around a model’s output. • Continued strengthening of validation practices through expansion of model- level validation procedures, use of an on-going validation training program and further embedment of a validation quality assurance process. • Executed on hiring strategy by expanding the model risk team to support a wider range of model validation demand, newly emerging model risks, and an enhanced focus on regulatory models . • Progressed model inception validation by bringing more models into compliance with the model risk management framework, including our first algorithmic trading models Barclays is committed to continuing to drive the right culture throughout all levels of the organisation. The Group will continue to enhance effective management of Compliance risk and appropriately consider the relevant tools, governance and management information in decision-making processes. Focus on management of Compliance risk is ongoing and, alongside other relevant business and control management information, the Trading Entity Conduct Risk Dashboard is a key component of this. The Group continues to review the role and impact of Compliance risk events and issues in remuneration decisions at both the individual and business level. In 2023, the Group maintained focus on new and heightened inherent Compliance risks, including those relating to the cost of living crisis, the evolving threat landscape as related to financial crime, and challenges in ensuring customer and client data is handled appropriately. These risks continue to be monitored on an ongoing basis. A key area of focus has been the implementation and embedment of the FCA’s new Consumer Duty, with rules for open products and services taking effect at the end July 2023. Businesses have continued to assess the potential customer, client and market impacts of strategic change. As part of the 2023 medium-term planning process, material Compliance risks associated with strategic and financial plans were assessed. Throughout 2023, Compliance risks were raised by each business area for consideration by relevant Board level committees. These committees reviewed the risks raised and whether management’s proposed actions were appropriate to mitigate the risks effectively. During 2023, laws, rules and regulation risk (LRR risk) was created as a new risk under the Compliance Principal Risk. LRR is intended to mitigate the risk of failing to identify applicable LRRs, and ensure appropriate steps are in place to monitor and oversee LRRs. Work is underway to implement processes to support the management and oversight of LRR Risk. The Group continued to incur costs in relation to litigation and conduct matters, refer to Note 25 Legal, competition and regulatory matters and Note 23 Provisions for further details. Costs include customer redress and remediation, as well as fines and settlements. Resolution of these matters remains a necessary and important part of delivering the Group’s strategy and an ongoing commitment to improve oversight of culture and conduct. Trading Entity Conduct Risk Dashboards, setting out key indicators in relation to conduct and financial crime risk, are provided to the respective Board Risk Committees and senior management. These continue to be evolved and enhanced to allow effective oversight and decision-making. Work is ongoing to enhance the Compliance Risk Control Environment in a timely and effective manner to ensure the Group operates within Risk Appetite. The tolerance adherence is assessed by the business areas through key indicators and reported to the relevant Trading Entity Board Committees as part of the Conduct Risk Dashboard governance process. The Group remains focused on the continuous improvements being made to manage risk effectively with an emphasis on enhancing governance and management information to identify risk at earlier stages. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 362 Risk performance - Model risk, Compliance risk, Reputation risk and Legal risk (continued) Other improvements during 2023 included a review and update of the supporting legal risk policies, standards and mandatory training, reinforced by ongoing engagement with and education of the Group’s businesses and functions by Legal Function colleagues. Legal risk tolerances and legal risk appetite have also been reviewed. Tolerances adherence is assessed through key indicators, which are also used to evaluate the legal risk profile and are reviewed, at least annually, through the relevant risk and control committees. Mandatory controls to manage legal risks are set out in the legal risk standards and are subject to ongoing monitoring. The implementation of changes to the compliance risk management framework referred to above (and described in more detail on page 361) also mitigate legal risk. Reputation risk Barclays is committed to identifying reputation risks and issues as early as possible and managing them appropriately. At a Group level throughout 2023, reputation risks and issues were overseen by the Board which reviews the processes and policies which Barclays identifies and manages reputation risk. Within the Barclays Bank UK Group and the Barclays Bank Group reputation risks and issues were overseen by the respective risk and Board risk committees. The top live and emerging reputation risks and issues within the Barclays Bank UK Group and the Barclays Bank Group are included within an over-arching quarterly report at the respective Board level. The Board reviewed risks escalated by the businesses and considered whether management’s proposed actions, for example attaching conditions to proposed client transactions or increased engagement with impacted stakeholders, were appropriate to mitigate the risks effectively. The Board also received regular updates with regard to key reputation risks and issues, including: Barclays' response to global conflicts; Barclays’ association with sensitive sectors; access to banking; lending practices and the resilience of key Barclays systems and processes. The Group continued to incur costs in relation to litigation and conduct matters, refer to Note 25 Legal, competition and regulatory matters and Note 23 Provisions for further details. Costs include customer redress and remediation, as well as fines and settlements. Resolution of these matters remains an ongoing commitment to improve oversight of culture and conduct and management of reputation risks. As part of Barclays 2023 Medium Term Planning process, material reputation risks associated with strategic and financial plans were also assessed. Legal risk The Group remains committed to continuous improvements in managing legal risk effectively. During 2023, the Group-wide legal risk management framework was updated to complement and accommodate the introduction of changes to the compliance risk management framework, which includes the responsibility of the Legal Function to proactively identify, communicate and provide legal advice on applicable laws, rules and regulations. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 363 Supervision and regulation Supervision of the Group The Group’s operations, including its overseas branches, subsidiaries and associates, are subject to a large number of rules and regulations applicable to the conduct of banking and financial services business in each of the jurisdictions in which the Group operates. These apply to business operations, impact financial returns and include capital, leverage and liquidity requirements, authorisation, registration and reporting requirements, restrictions on certain activities, and conduct of business regulations, amongst other applicable regulatory requirements. Regulatory developments in one or more jurisdictions may impact the Group globally. We focus particularly on UK, US and EU regulation in this Report due to the location of the Group’s principal areas of business. Regulations elsewhere may also have a significant impact on the Group due to the location of its branches, subsidiaries and, in some cases, clients. For more information on the risks related to the supervision and regulation of the Group, including regulatory change, see the material existing and emerging risk entitled ‘Regulatory Change agenda and impact on Business Model’ in the Material existing and emerging risks section. Supervision in the UK In the UK, day-to-day regulation and supervision of the Group is divided between the Prudential Regulation Authority (PRA) (a division of the Bank of England (BoE)) and the Financial Conduct Authority (FCA). In addition, the Financial Policy Committee (FPC) of the BoE has influence on the prudential requirements that may be imposed on the banking system through its powers of direction and recommendation. Certain members of the Group are also subject to regulatory initiatives undertaken by the UK Payment Systems Regulator (PSR), as a participant in payment systems regulated by the PSR. Barclays Bank PLC and Barclays Bank UK PLC are both authorised with permission to accept deposits, amongst other things, and are subject to prudential supervision by the PRA and to conduct regulation and supervision by the FCA. The Barclays Bank Group is subject to prudential supervision on a solo-consolidated basis and the Barclays Bank UK Group is subject to prudential supervision on a group sub- consolidated basis and on an individual basis. The Group as a whole is also subject to prudential supervision by the PRA on a group consolidated basis. Barclays PLC has been approved by the PRA as a financial holding company. Barclays Capital Securities Limited (BCSL) is authorised and subject to prudential supervision by the PRA as a PRA- designated investment firm and subject to conduct regulation and supervision by the FCA. Barclays Execution Services Limited is an appointed representative of Barclays Bank PLC, Barclays Bank UK PLC and Clydesdale Financial Services Limited. The PRA’s supervision of the Group is conducted through a variety of regulatory tools, including the collection of information by way of prudential returns or cross-firm reviews, reports obtained from skilled persons, information gathering, regular supervisory visits and regular meetings with the Group’s management and directors to discuss issues such as strategy, governance, financial resilience, operational resilience, risk management, and recovery and resolution. Further, the BoE, as the UK resolution authority, informs prudential requirements and sets requirements for the Group relating to resolution preparedness. The FCA’s supervision of the UK firms in the Group is carried out through a combination of proactive engagement meetings, regular supervisory visits, information gathering and regular meetings with management and directors to discuss issues such as customer strategy, fair treatment of customers, and financial crime controls, as well as cross- sectoral reviews which analyse the different areas of the market and the risks that may lie ahead. The FCA and the PRA also apply the Senior Managers and Certification Regime (the SMCR) which imposes a regulatory approval, individual accountability and fitness and propriety framework in respect of senior individuals within relevant firms. FCA supervision has focused on conduct risk and customer/client outcomes through implementation of the Consumer Duty (including product design and fair value), fraud and anti-money laundering controls, market operations, access to cash, fair treatment of vulnerable customers and payment account access and closures. PRA supervision has focused on financial and operational resilience, controls, credit risk management, systems and controls, climate risk and resolvability, where resolvability is reviewed in conjunction with the Resolution Directorate (a division of the BoE). Both the PRA and the FCA apply standards that generally either anticipate or go beyond requirements established by global or EU standards, whether in relation to capital, leverage and liquidity, resolvability and resolution or matters of conduct. The UK is in the process of reviewing and revising the EU legislation that was onshored into English law following the UK's departure from the EU. This process is ongoing, but based on current indications, potential areas of divergence in approach between the UK and the EU in existing areas of regulation appear moderate and are not expected to result in materially different standards of regulation. Divergence might become more marked in new areas of regulation, such as ESG and Digital. The Financial Services and Markets Act 2023 (FSMA 2023) established a framework for the revocation of retained EU law relating to financial services, with HM Treasury intending to repeal retained EU legislative provisions subject to the transfer of its provisions to the UK regulators’ rules where appropriate. The Government is not expected to revoke retained EU law relating to financial services unless the FCA and/or PRA have drafted and consulted on rules in the relevant areas, where it is appropriate that the provisions are replaced. However, HM Treasury may specify parts of retained EU law where the regulators are exempt from such requirements, for example where they are restating retained EU law revoked through FSMA 2023 in their rulebooks without material changes or where they are replacing revoked retained EU law with material changes but the only material effect is to reduce a regulatory burden. Where changes also have other material effects, which may include impacts on the regulators’ objectives, for example, the Government has indicated that it is appropriate to require the regulators to consult. The medium term outlook for the costs and impact of operating under the post-Brexit UK regime remains unclear as the regulatory landscape continues to develop. There is potential for an increase in regulatory implementation costs in the near term to adapt systems and controls. Supervision in the EU The Group’s operations in Europe are authorised and regulated by a combination of its home regulators and host regulators in the European countries where the Group operates. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 364 Supervision and regulation (continued) Barclays Bank Ireland PLC is licensed as a credit institution by the Central Bank of Ireland (CBI) and is designated as a significant institution falling under direct supervision on a solo basis by the European Central Bank (ECB) for prudential purposes. Barclays Bank Ireland PLC’s EU branches are supervised by the ECB and are also subject to direct supervision for local conduct purposes by national supervisory authorities in the EU jurisdictions where they are established. Barclays Bank Ireland PLC is subject to the requirements set by the Single Resolution Board (SRB) as the resolution authority of Barclays Bank Ireland PLC. Barclays Bank Ireland PLC is also subject to supervision by the CBI as home state or competent authority under various EU financial services directives and regulations. The Group provides the majority of its cross-border banking and investment services to EEA clients via Barclays Bank Ireland PLC. Additionally, Barclays Bank PLC and BCSL are authorised in certain EEA Member States to enable them to continue to conduct a limited range of activities without a presence, including accessing EEA trading venues and interdealer trading. Barclays Bank PLC also has a branch in Paris (to facilitate access to Target 2), which is regulated by the ACPR. Supervision in the US Barclays PLC, Barclays Bank PLC and its New York branch, and Barclays Bank PLC’s US subsidiaries are subject to a comprehensive regulatory framework involving numerous statutes, rules and regulations in the US. For example, the Group’s US activities and operations are subject to supervision and regulation by the Board of Governors of the Federal Reserve System (FRB), as well as additional supervision, requirements and restrictions imposed by other federal and state regulators and self-regulatory organisations (SROs). In some cases, US requirements may impose restrictions on the Group’s global activities, in addition to its activities in the US. Barclays PLC, Barclays Bank PLC, Barclays US Holdings Limited (BUSHL), Barclays US LLC (BUSL), and Barclays Group US Inc. (BGUS) are regulated as bank holding companies (BHCs) by the FRB. BUSL is the Group’s ultimate US holding company that holds substantially all of the Group’s US subsidiaries (including Barclays Capital Inc. (BCI) and Barclays Bank Delaware). BUSL is subject to requirements in respect of capital adequacy, capital planning and stress testing, risk management and governance, liquidity, leverage limits, large exposure limits, restrictions on activities and financial regulatory reporting. Barclays Bank PLC’s New York branch is also subject to enhanced prudential standards relating to, among other things, liquidity and risk management. Barclays PLC, Barclays Bank PLC, BUSHL and BUSL have financial holding company (FHC) status under the Bank Holding Company Act of 1956. FHC status allows these entities to engage in a variety of financial and related activities, directly or through subsidiaries, including underwriting, dealing and market making in securities. Failure to maintain FHC status could result in increasingly stringent penalties and, ultimately, in the closure or cessation of certain operations in the US. In addition to oversight by the FRB, Barclays Bank PLC’s New York branch and many of the Group’s subsidiaries are regulated by additional US authorities based on the location or activities of those entities. The New York branch of Barclays Bank PLC is subject to supervision and regulation by the New York State Department of Financial Services (NYSDFS). Barclays Bank Delaware, a Delaware chartered bank, is subject to supervision and regulation by the Delaware Office of the State Bank Commissioner, the Federal Deposit Insurance Corporation (FDIC), the FRB and the Consumer Financial Protection Bureau (CFPB). The deposits of Barclays Bank Delaware are insured by the FDIC, up to applicable limits. Barclays PLC, Barclays Bank PLC, BUSHL, BUSL, and BGUS are required to act as a source of strength for Barclays Bank Delaware. This could, among other things, require these entities to provide capital support to Barclays Bank Delaware if it fails to meet applicable regulatory capital requirements. The Group’s US securities broker/dealer and investment banking operations are conducted primarily through BCI, and are also subject to ongoing supervision and regulation by the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA) and other government agencies and SROs under US federal and state securities laws. BCI is also registered as a Futures Commission Merchant with the Commodity Futures Trading Commission (CFTC), through which the Group conducts its US futures and options on futures business, including client clearing operations, which are subject to ongoing supervision and regulation by the CFTC, the National Futures Association and other SROs. Under the US framework for regulating swaps and security-based swaps established under Title VII of the Dodd- Frank Act, the CFTC has regulatory authority over swaps, the SEC has regulatory authority over security-based swaps, and the CFTC and SEC jointly regulate mixed swaps (as such terms are defined in the relevant legislation). Accordingly, the Group’s activities related to US swaps and security-based swaps are principally conducted by Barclays Bank PLC and are subject to ongoing supervision and regulation by the CFTC and the SEC, respectively. Barclays Bank PLC is provisionally registered as a swap dealer with the CFTC and conditionally registered as a security-based swap dealer with the SEC. Barclays Bank PLC is also subject to the FRB swaps rules with respect to margin and capital requirements. In addition, Barclays Bank Ireland PLC is provisionally registered as a swap dealer with the CFTC and is subject to the FRB swaps rules with respect to margin and capital. Supervision in Asia Pacific The Group’s operations in Asia Pacific are supervised and regulated by a broad range of national banking and financial services regulators. Prudential regulation Certain Basel III standards were implemented in EU law through the Capital Requirements Regulation (CRR) and the Capital Requirements Directive IV (CRD IV), as amended by CRR II and CRD V. These standards were retained in the UK regulatory framework via a series of onshoring instruments when the UK withdrew from the European Union. Beyond the minimum standards required by CRR, the PRA has expected the Group, in common with other major UK banks and building societies, to meet a 7% Common Equity Tier 1 (CET1) ratio at the level of the consolidated group since 1 January 2016. The 7% CET1 ratio is made up of a Pillar 1 minimum capital requirement of 4.5% CET1 and a capital conservation buffer which must be met entirely with CET1 capital. Global systemically important banks (G- SIBs), such as the Barclays Group, are subject to a number of additional prudential requirements, including the requirement to hold additional loss- absorbing capacity and additional capital buffers above the level required by Basel III standards. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 365 Supervision and regulation (continued) The level of the G-SIB buffer is set by the Financial Stability Board (FSB) according to a bank’s systemic importance and can range from 1% to 3.5% of risk-weighted assets (RWAs). The G-SIB buffer must be met with CET1 capital. In November 2023, the FSB published an update to its list of G- SIBs, maintaining the 1.5% G-SIB buffer that applies to the Group. The Group is subject to a ‘combined buffer requirement’ consisting of (i) a capital conservation buffer of 2.5% of RWAs, and (ii) a countercyclical capital buffer (CCyB). The CCyB is based on rates determined by the regulatory authorities in each jurisdiction in which the Group maintains exposures. In the UK, the CCyB rate is set by the FPC and is currently 2%. The PRA requires UK firms to hold additional capital to cover risks which the PRA assesses are not fully captured by the Pillar 1 capital requirement. The PRA sets this additional capital requirement (Pillar 2A) at least annually, derived from each firm’s individual capital guidance. Under current PRA rules, the Pillar 2A requirement must be met with at least 56.25% CET1 capital and no more than 25% tier 2 capital. In addition, the capital that firms use to meet their minimum requirements (Pillar 1 and Pillar 2A) cannot be counted towards meeting the combined buffer requirement. The PRA may also impose a confidential 'PRA buffer' to cover risks over a forward looking planning horizon, including with regard to firm-specific stresses or management and governance weaknesses. The PRA buffer must be met separately to the combined buffer requirement, and must be met fully with CET1 capital. As part of its approach to ring fencing, the FPC established a framework to apply a firm-specific systemic risk buffer (SRB). The purpose of the SRB was to increase the capacity of ring-fenced bodies, such as Barclays Bank UK PLC, to absorb stress. With the implementation of CRD V, the Other Systemically Important Institutions Buffer (O-SII buffer) replaced the SRB. The O-SII buffer can be set between 0% and 3% and has to be met solely with CET1 capital. The O-SII buffer rate applicable to Barclays Bank UK PLC is currently set by the PRA at 1%. Previously, total assets were used as the metric to determine O-SII buffer rates but the FPC announced in 2022 that this would change to the UK leverage exposure measure and that it would recalibrate the thresholds used to determine O-SII buffer rates to prevent an overall tightening or loosening of the framework relative to its pre-Covid level. The PRA’s 2023 review of the O-SII buffer was based on end-2022 leverage exposure measures and maintained the O-SII buffer rate applicable to Barclays Bank UK PLC at 1% (applicable from January 2025). For future reviews, the average of firms’ quarter-end leverage exposure measure over the year will be used to determine O-SII buffer rates, rather than the year-end value. In addition, Barclays Bank Ireland PLC is identified as a O-SII by the CBI, which has imposed an O- SII buffer on Barclays Bank Ireland PLC of 1%. On 30 November 2022, the PRA published a consultation paper concerning the implementation of the remaining Basel III standards, which include a revised standardised approach for credit risk, the elimination of modelled approaches for certain credit risk exposure categories, a new standardised approach for operational risk, a new market risk approach and the implementation of an output floor requiring reported RWAs calculated under standardised and modelled approaches to be a minimum of 72.5% of fully standardised calculations. In December 2023 the PRA published its first collection of near-final policy proposals for implementing these measures, including those for market risk, operational risk and the Credit Valuation Adjustment (CVA) and counterparty credit risk. A further collection of policies, including those for credit risk and credit risk mitigation, are expected to be published by the PRA in Q2 2024. The implementation date for these standards has been extended to 1 July 2025. In June 2023, the EU reached a provisional agreement on the implementation of the remaining parts of the Basel III reforms. In December 2023, the preparatory bodies of the Council and Parliament endorsed this banking package. It consists of a legislative act to amend the Capital Requirements Directive (Directive 2013/36/EU), and a legislative act to amend the Capital Requirements Regulation (Regulation No (EU)2013/575) (referred to as CRR III and CRD VI, respectively). The relevant measures are scheduled to apply from January 2025 and mid-2025 respectively. In the US, the Barclays Bank Group (including BUSL) is subject to prudential requirements for large domestic US banking organisations, foreign banking organisations and their intermediate holding companies (IHCs) set by the FRB and other US regulatory agencies. BUSL is a “Category III” IHC. BUSL (and Barclays Bank Delaware) is subject to reduced (calibrated at 85%) standardised liquidity requirements, including the liquidity coverage ratio and NSFR. BUSL is also subject to the FRB’s rules regarding single counterparty credit limits (SCCL). The SCCL apply to the largest US BHCs and foreign banks’ (including the Group’s) US operations. The SCCL creates two separate limits for foreign banks, the first on combined US operations (CUSO) and the second on the US IHC (BUSL). The SCCL for BUSL, as a US BHC, requires that exposure to an unaffiliated counterparty of BUSL not exceed 25% of BUSL’s tier 1 capital. With respect to the CUSO, the SCCL rule allows certification to the FRB that a foreign bank complies with comparable home country regulation. Barclays Bank PLC has complied with the CUSO requirement since 1 January 2022, with the first certification applicable for its Q1 2022 results. To date, Barclays Bank PLC has not relied on home country certification. In July 2023, the FRB and other US regulatory agencies proposed changes to the regulatory capital rules applicable to US banks, BHCs and IHCs with total consolidated assets of $100 billion or more (Large Banking Organizations). These changes are intended to be broadly consistent with revisions to Basel III finalised by the Basel Committee on Banking Supervision in 2017. The US proposal would end the use of internal models for credit risk, credit valuation adjustments, and operational risk, create an expanded risk-based credit capital approach in addition to retaining a modified version of the current standardised approach, and make changes to the modelling requirements for market risk. A Large Banking Organization would be required to calculate its risk-based capital ratios under both the expanded risk-based approach and the current standardised approach and would use the lower of the two. All capital buffer requirements would apply regardless of whether the expanded risk-based approach or the existing standardised approach produces the lower ratio. The proposal was subject to a public comment period which ended on 16 January 2024, and would not be effective until 1 July Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 366 Supervision and regulation (continued) 2025. Certain aspects of the proposal would be subject to a three-year phase-in period. We are analysing the potential effects of the proposed changes, including the timing of implementation. Stress testing The Group and certain of its members are subject to supervisory stress testing exercises in a number of jurisdictions, designed to assess the resilience of banks to adverse economic or financial developments and ensure that they have robust, forward-looking capital planning processes that account for the risks associated with their business profile. Assessment by regulators is on both a quantitative and qualitative basis, the latter focusing on such elements as data provision and stress testing capability, including model risk management and internal management processes and controls. Recovery and Resolution Stabilisation and resolution framework The current UK framework for recovery and resolution was established by the Banking Act 2009, as amended. The EU framework was established by the 2014 Bank Recovery and Resolution Directive (BRRD), as amended by BRRD II. The BoE, as the UK resolution authority, has the power to resolve a UK financial institution that is failing or likely to fail by exercising certain stabilisation tools, including (i) bail-in: the cancellation, transfer or dilution of a relevant entity’s equity and write-down or conversion of the claims of a relevant entity's unsecured creditors (including holders of capital instruments) and conversion of those claims into equity as necessary to restore solvency; (ii) the transfer of all or part of a relevant entity's business to a private sector purchaser; and (iii) the transfer of all or part of a relevant entity's business to a “bridge bank” controlled by the BoE. When exercising any of its stabilisation powers, the BoE must generally provide that shareholders bear first losses, followed by creditors in accordance with the priority of their claims in insolvency. In order to enable the exercise of its stabilisation powers, the BoE may impose a temporary stay on the rights of creditors to terminate, accelerate or close out contracts, or override events of default or termination rights that might otherwise be invoked as a result of a resolution action and modify contractual arrangements in certain circumstances (including a variation of the terms of any securities). HM Treasury may also amend the law for the purpose of enabling it to use its powers under this regime effectively, potentially with retrospective effect. In addition and distinct from bail-in, the BoE has the power to permanently write- down, or convert into equity, tier 1 capital instruments, tier 2 capital instruments and internal eligible liabilities at the point of non-viability of an institution pursuant to broader resolution powers under the Banking Act. The BoE’s preferred approach for the resolution of the Group is a bail-in strategy with a single point of entry at Barclays PLC. Under such a strategy, Barclays PLC’s subsidiaries would remain operational while Barclays PLC’s capital instruments and eligible liabilities would be written down or converted to equity in order to recapitalise the Group and allow for the continued provision of services and operations throughout the resolution. The order in which the bail-in tool is applied reflects the hierarchy of capital instruments under applicable UK legislation and rules, and otherwise respecting the hierarchy of claims in an ordinary insolvency. Accordingly, the more subordinated the claim, the more likely losses will be suffered by owners of the claim. The PRA has made rules that require authorised firms to draw up recovery plans and resolution packs. Recovery plans are designed to outline credible actions that authorised firms could implement in the event of severe stress in order to restore their business to a stable and sustainable condition. The submission of resolution packs was suspended by the PRA in 2018 until further notice and replaced by annual resolution reporting. It continues to be suspended pending PRA assessment of areas of potential duplication between different reporting expectations. The Barclays Group, however, is required to provide the PRA with a recovery plan biennially, although the Group maintains and refreshes this on an annual basis. Removal of potential impediments to an orderly resolution of a banking group or one or more of its subsidiaries is considered as part of the BoE’s resolution planning for each firm, and the BoE can require firms to make significant changes in order to enhance their resolvability. Under the BOE’s Resolvability Assessment Framework (RAF) firms are required to have in place capabilities covering three resolvability outcomes: (i) adequate financial resources; (ii) being able to continue to do business through resolution and restructuring; and (iii) being able to communicate and co-ordinate within the firm and with authorities. Barclays Group’s second self-assessment report on resolvability under the RAF was submitted to the PRA/BoE in 2023 and public disclosures by both Barclays Group and the PRA/BoE on the most recent report are due in June 2024. Updated reports and disclosures are required every two years. The BoE’s assessment on the 2021 report, published in June 2022, concluded that there were no shortcomings, deficiencies or substantive impediments identified in the Group’s resolution capabilities that could impede its ability to execute the preferred resolution strategy. In future, should any such issues be identified, the PRA/BoE could exercise its various powers to direct the Group to address the relevant issues. While regulators in many jurisdictions have indicated a preference for single point of entry resolution for the Group, additional resolution or bankruptcy provisions may apply to certain non-UK Group entities or branches. In the US, BUSL is subject to the Orderly Liquidation Authority established by Title II of the Dodd-Frank Act (DFA), a regime for the orderly liquidation of systemically important financial institutions by the FDIC, as an alternative to proceedings under the US Bankruptcy Code. In addition, the licensing authorities of Barclays Bank PLC New York branch and of Barclays Bank Delaware have the authority to take possession of the business and property of the applicable branch or entity they license and/or to revoke or suspend such licence. In the US, Title I of the DFA, as amended, and the implementing regulations issued by the FRB and the FDIC require each bank holding company with assets of $250bn or more, including those within the Group, to prepare and submit a plan for the orderly resolution of subsidiaries and operations in the event of future material financial distress or failure. The Group submitted a “targeted plan” in December 2021. The agencies did not identify any shortcomings or deficiencies with the Group’s 2021 US Resolution Plan. In August 2023, the FRB and FDIC proposed new guidance for triennial full filers (such as the Group) that would affect the content required to be included in the US Resolution Plan. The proposal generally represents an expansion of the current 165(d) resolution planning guidance the Group is subject to as a “specified foreign banking organization.” The Group’s next submission of the US Resolution Plan in respect of its US operations will be a “full plan” due 31 March 2025, unless the FRB and FDIC provide a further extension. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 367 Supervision and regulation (continued) Barclays Bank Ireland PLC is required by the ECB to submit a standalone BRRD compliant recovery plan on an annual basis. As a Significant Institution under direct ECB supervision, Barclays Bank Ireland PLC falls within the remit of the Single Resolution Board (SRB), as the resolution authority for the European Banking Union. Under the provisions of the BRRD and EU Single Resolution Mechanism Regulation (SRMR), the SRB is required to determine the optimal resolution strategy for Barclays Bank Ireland PLC and, also, to prepare a resolution plan for the bank. The SRB undertakes this work within the context of the BoE’s preferred resolution strategy of single point of entry with bail in at Barclays PLC. In order to carry out its mandate, the SRB collects detailed structural and other information from Barclays Bank Ireland PLC on a regular basis, as well as engaging with the bank to identify and address impediments to resolution. This work is done in coordination with the BoE, as the Group resolution authority. Barclays Bank Ireland PLC is required to meet the SRB’s requirements for resolution as set out in the SRB’s ‘Expectations for Banks’ document by 31 July 2024 (this deadline was extended by the SRB in October 2023 from the original deadline of 31 December 2023). In April 2023, the EU Commission proposed certain reforms to strengthen the EU’s bank crisis management and deposit insurance (CMDI) framework, including extending depositor protection to public entities and client money deposited in certain types of client funds. The EU legislative process remains ongoing. Provisional agreement was reached in December 2023 between the Council and the European Parliament on the treatment of internal MREL in bank resolution groups, referred to as the ‘Daisy Chains’ proposal (a confined part of the CMDI proposals). This treatment is expected to apply from the second half of 2024. TLAC and MREL The Group is under the supervision of the BoE, as the UK resolution authority, and is subject to a Minimum Requirement for Own Funds and Eligible Liabilities (MREL), which includes a component reflecting the FSB’s standards on total loss absorbency capacity (TLAC). Since 1 January 2022, G-SIBs with resolution entities incorporated in the UK have been required to meet an MREL equivalent to the higher of: (i) two times the sum of their Pillar 1 and Pillar 2A requirements; or (ii) the higher of two times their leverage ratio requirement or 6.75% of leverage exposures. Internal MREL for operating subsidiaries is subject to a scalar in the 75-90% range of the external requirement that would apply to the subsidiary if it were a resolution entity. The starting point for the scalar is 90% for ring-fenced bank sub-groups. Barclays Bank Ireland PLC is subject to the SRB’s MREL policy, as issued in May 2023, in respect of the internal MREL that it will be required to issue to the Group. The SRB’s current calibration of internal MREL for non-resolution entities is expressed as two ratios that have to be met in parallel: (a) two times the sum of: (i) the firm’s Pillar 1 requirement; and (ii) its Pillar 2 requirement; and (b) two times the leverage ratio requirement. The SRB’s policy does not apply any scalar in respect of the internal MREL requirement. Under the SRB MREL policy, a bank specific adjustment can be applied by the SRB to MREL requirements. From 1 January 2024, a revised deduction regime will apply for the indirect subscription of instruments eligible for internal MREL to avoid the double-counting of MREL elements at the level of intermediate entities within a resolution group. In the US, the FRB’s TLAC rule includes provisions that require BUSL to have: (i) a specified outstanding amount of eligible long-term debt; (ii) a specified outstanding amount of TLAC (consisting of common and preferred equity regulatory capital plus eligible long-term debt); and (iii) a specified common equity buffer. In addition, the FRB’s TLAC rule prohibits BUSL, for so long as the Group’s overall resolution plan treats BUSL as a non-resolution entity, from issuing TLAC to entities other than those within the Group. Bank Levy and FSCS The BRRD established a requirement for EU member states to set up a pre-funded resolution financing arrangement with funding equal to 1% of covered deposits by 31 December 2024 to cover the costs of bank resolutions. The UK implemented this requirement by way of a tax on the balance sheets of banks known as the ‘Bank Levy’, which remains in place. In addition, the UK has a statutory compensation fund called the Financial Services Compensation Scheme (FSCS), which is funded by way of annual levies on most authorised financial services firms. Structural reform In the UK, the Financial Services (Banking Reform) Act 2013 put in place a framework for ring-fencing certain operations of large banks. Ring-fencing requires, among other things, the separation of the retail and smaller deposit-taking business activities of UK banks into a legally distinct, operationally separate and economically independent entity (a ‘ring-fenced bank’), which is not permitted to undertake a range of activities. In 2023, HM Treasury issued a public call for evidence on aligning the ring-fencing and resolution regimes, amongst other things, and a consultation on reforms to the ring-fencing regime, including amendments to the thresholds above which the regime applies, permitting ring-fenced banks to establish branches and subsidiaries outside the UK or the EEA and the introduction of a transitional period for compliance with the ring- fencing regime following mergers or acquisitions. HM Treasury plans to introduce legislation to implement these reforms in early 2024. The PRA consulted on complementary reforms to HM Treasury's proposals in 2023 and, separately, conducted a review of its ring- fencing rules in compliance with its statutory duty under FSMA to do so every five years. The PRA announced in early 2024 that it intends to consult on targeted reforms to its ring-fencing rules as a result of its review, although the overall conclusion was that most of those rules are performing satisfactorily. US regulation places further substantive limits on the activities that may be conducted by banks and holding companies, including foreign banking organisations such as the Group. The ‘Volcker Rule’, which was part of the DFA and which came into effect in the US in 2015, prohibits banking entities from undertaking certain proprietary trading activities and limits such entities’ ability to sponsor or invest in certain private equity funds and hedge funds (in each case broadly defined). As required by the rule, the Group has developed and implemented an extensive compliance and monitoring programme addressing proprietary trading and covered fund activities (both inside and outside of the US). Market infrastructure regulation In recent years, regulators as well as global-standard setting bodies such as the International Organization of Securities Commissions (IOSCO) have focused on improving transparency and reducing risk in markets, particularly risks related to over-the-counter (OTC) derivative transactions. This focus has resulted in a variety of new regulations across the G20 countries and beyond that require or Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 368 Supervision and regulation (continued) encourage on-venue trading, clearing, posting of margin and disclosure of pre- trade and post-trade information. In particular, the Markets in Financial Instruments Directive and Markets in Financial Instruments Regulation (collectively referred to as MiFID II) have affected many of the markets in which the Group operates, the instruments in which it trades and the way it transacts with market counterparties and other customers. MiFID II is currently undergoing a review process in the EU as part of the EU’s ongoing focus on the development of a stronger Capital Markets Union. In the UK, FSMA 2023 introduced reforms to remove certain requirements which were previously applicable to trading in wholesale markets and to promote investment in line with the Wholesale Markets Review. Other changes proposed by the review are being progressed by way of amendments to regulatory rules and guidance. Regulation of benchmarks The EU and UK Benchmarks Regulation apply to the administration, contribution and use of benchmarks within the EU and the UK, respectively. Financial institutions within the EU or the UK, as applicable, are prohibited from using benchmarks unless their administrators are authorised, registered or otherwise recognised in the EU or the UK, respectively. This prohibition does not currently apply in respect of third country benchmark administrators, as the prohibition on usage of such benchmarks will take effect from the end of 2025 (EU) and 2030 (UK). The FCA has also been working to phase out use of LIBOR, with all LIBOR panels now having ended. Synthetic versions of GBP and USD LIBOR have been made available only for a limited period of time for holders of legacy contracts. Global regulators in conjunction with the industry have developed and are continuing to develop alternative benchmarks and risk- free rate fallback arrangements, including updates to existing, as well as new, applicable legislation. Regulation of the derivatives market The European Market Infrastructure Regulation (EMIR) introduced requirements designed to improve transparency and reduce the risks associated with the derivatives market. EMIR has operational and financial impacts on the Group, including by imposing collateral requirements and a requirement to centrally clear certain OTC derivatives contracts on a broad range of market participants. Access to the clearing services of certain Central Counterparties (CCPs) used by Group entities is currently permitted under temporary equivalence and recognition regimes and decisions in the UK and EU. If not extended or made permanent, the EU’s equivalence decision for UK Central Counterparties (CCPs), and exemption for certain intragroup transactions from the EMIR derivatives clearing and margin obligations, both due to expire at the end of June 2025, could also have operational and financial impacts on the Group, as could the removal of temporary recognition of non-UK CCPs by the UK. The EU has introduced two legislative proposals to amend EMIR which introduce, inter alia, changes to the intragroup transactions exemption making it easier to rely on the exemption, as well as aiming to reduce the concentration of exposures to systemically important third- country central counterparties (in particular, UK Central Counterparties). The legislative process is ongoing. US regulators have imposed similar rules as in the EU with respect to the mandatory on-venue trading and clearing of certain derivatives, and post-trade transparency, as well as in relation to the margining of OTC derivatives. In December 2017, the CFTC and the European Commission recognised the trading venues of each other’s jurisdiction to allow market participants to comply with mandatory on- venue trading requirements while trading on certain venues recognised by the other jurisdiction. In December 2022, the CFTC extended temporary relief that would permit trading venues and market participants located in the UK to continue to rely on this mutual recognition framework following the withdrawal of the UK from the EU. Certain participants in US swap markets are required to register with the CFTC as ‘swap dealers’ or ‘major swap participants’ and/or, with the SEC as ‘security-based swap dealers’ or ‘major security-based swap participants’. Such registrants are subject to CFTC and/or SEC regulation and oversight. Barclays Bank PLC is provisionally registered with the CFTC as a swap dealer and conditionally registered with the SEC as a security-based swap dealer. In addition, Barclays Bank Ireland PLC is provisionally registered as a Swap Dealer with the CFTC. Accordingly, Barclays Bank PLC and Barclays Bank Ireland PLC are both subject to CFTC rules on business conduct, record-keeping and reporting, and Barclays Bank PLC is subject to SEC rules on business conduct, record-keeping and reporting. However, since Barclays Bank PLC and Barclays Bank Ireland PLC are non-US swap dealers, they are only subject to certain of the CFTC’s requirements in respect of swap transactions with US persons and certain persons guaranteed by or affiliated with US persons. In addition, since Barclays Bank PLC is a non-US security-based swap dealer, it is only subject to certain of the SEC’s requirements in respect of security-based swap transactions with US persons or which are arranged, negotiated, or executed by US personnel. Additionally, Barclays Bank PLC and Barclays Bank Ireland PLC have elected to comply with certain CFTC/SEC requirements, as applicable, through ‘substituted compliance’ with EU/UK requirements pursuant to relevant determinations and related relief issued by the SEC and the CFTC, as applicable. Barclays Bank PLC and Barclays Bank Ireland PLC are subject to FRB rules on capital and margin. In 2022, the SEC proposed new rules that would require any person with a security- based swap position (aggregated across all affiliated persons) that exceeds any of the thresholds specified by the SEC to promptly report certain information by the next business day, including the identity of the reporting person and the security- based swap position, as well as the ownership of securities positions related to the security-based swap position. Such reports would be available publicly. If adopted as proposed, this rule could increase the burden and cost to Barclays Bank PLC of utilising security-based swaps. Other regulatory developments in the US In 2023, the SEC finalised amendments to shorten the standard settlement cycle for most broker-dealer transactions in securities from two business days after the trade (T+2) to one business day after the trade (T+1), which requires significant changes to BCI’s settlement procedures and practices, and introduced new rules requiring market-wide improvements in the rate of same-day affirmations and on central matching service providers. On 13 October 2023, the SEC adopted new rules to establish broad reporting requirements of the terms of securities loans to FINRA for public dissemination, and requiring FINRA to make publicly available certain information it receives regarding those lending transactions. On 13 October 2023, the SEC adopted new rules requiring a wide range of firms to file monthly reports with the SEC for large short positions in equity securities on a Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 369 Supervision and regulation (continued) new Form SHO, and amendments to the National Market System plan governing the Consolidated Audit Trail, which adds an additional reporting requirement for CAT- reporting firms relying on the bona fide market maker exception to Reg SHO’s locate requirement. On 30 October 2023, the SEC issued exemptive relief, which exempts broker- dealers from their review obligations concerning the issuer of an over-the- counter security prior to publication or submission of a quotation in that security with respect to a fixed-income security to be sold in compliance with the safe harbor in Rule 144A under the Securities Act of 1933. On 13 December 2023, the SEC adopted rule amendments under the Exchange Act that, among other things, will mandate central clearing of certain US Treasury securities transactions and amend the broker-dealer customer protection rule as it applies to margin posted for transactions in US Treasury securities. These rule amendments could impose additional costs on the Group’s Treasury securities trading activity. The SEC has also put forth a number of other recent proposals that, if adopted, could have a significant impact on the Group’s business and operations, including a series of market structure proposals which would have a significant impact on securities trading activity by BCI and other Group entities, as the SEC proposals would (a) impose a new SEC best execution obligation on securities broker-dealers, including BCI, (b) require that certain individual investor orders be exposed to auctions before they could be executed internally by certain trading centres, and (c) amend certain rules under Regulation NMS (National Market System) to adopt variable minimum pricing increments, reduce access fee caps for protected quotations, require that the amount of exchange fees and rebates be determinable at the time of execution, and update and expand to certain broker-dealers the disclosures required for order executions in NMS stocks, among other changes. Other regulation Consumer protection, culture, and diversity and inclusion In July 2023, the FCA’s new Consumer Duty came into force for new and existing products or services that are open to sale or renewal. It will apply to closed products and services from 31 July 2024. The duty sets higher expectations for the standard of care that firms provide to retail customers and impacts all aspects of Barclays' retail businesses, including every retail customer journey, product and service as well as our relationships with partners, suppliers and third parties. This has resulted in significant implementation costs and there will also be higher ongoing costs for the industry as a result of extensive monitoring and evidential requirements. Our regulators have enhanced their focus on the promotion of cultural values as a key area for banks. The UK regulators have also begun focusing on diversity and inclusion in financial services firms, with the PRA and FCA having published a consultation on the introduction of a new regulatory framework on diversity and inclusion in September 2023. The UK regulators expect to publish final rules on this issue in 2024. FSMA 2023 contains provisions mandating that the Payment Systems Regulator (PSR) require the reimbursement of authorised push payment scams by payment service providers, including Barclays. This reimbursement requirement will be split 50:50 between the sending and receiving firms. Changes to the rules of the Faster Payments Scheme and a new Specific Direction issued by the PSR to require reimbursement will take effect in October 2024. Data protection Most jurisdictions where the Group operates have adopted or are considering comprehensive laws concerning data protection and privacy. Regulations regarding data protection are increasing in number, as well as levels of enforcement, as manifested in increased amounts of fines and the severity of other penalties. We expect that personal privacy and data protection will continue to receive attention and focus from regulators, as well as public scrutiny and attention. The EU’s General Data Protection Regulation (GDPR) and the UK’s General Data Protection Regulation (UK GDPR) provide a framework of rights and duties designed to safeguard personal data and apply to the activities conducted from an establishment in the EU or the UK, respectively. The extraterritorial effect of the GDPR and the UK GDPR means entities established outside the EU or the UK may fall within the GDPR or the UK GDPR’s ambit when offering goods or services to EU/UK based customers or clients or conducting behavioural monitoring of individuals in the EU/UK. The Data Protection and Digital Information (No.2) Bill was introduced to the UK Parliament in March 2023, which if enacted will bring some divergence between the EU GDPR and UK GDPR. The UK government has indicated that it expects the Bill to become law in mid-2024, although there is still some uncertainty on timing and content. The data regime in China is likely to continue to evolve, governing the collection, processing and cross-border transfers of China-based individuals' personal data and related restricted data (e.g., macro/derived characteristics data which, if tampered with, divulged or destroyed, may endanger China's economic operation, social stability, national security - among other things - having regard to the volume and granularity of the data). In India, the Digital Personal Data Protection Act, 2023, may be implemented in phases during 2024 and beyond. Except under certain exemptions, its scope would include the processing of personal data in India and would extend to the profiling of, and offering goods and services to, India-based individuals outside of India. As the global data protection regulatory landscape develops, non- compliance with any such requirements and rules could lead to regulatory fines and other penalties. In the US, Barclays Bank Delaware is subject to the US Federal Gramm-Leach- Bliley Act (GLBA) and the California Privacy Rights Act of 2020, which amended the California Consumer Privacy Act of 2018 and came into effect on 1 January 2023 (CPRA). The GLBA limits the use and disclosure of non-public personal information to non-affiliated third parties, and requires financial institutions to provide written notice of their privacy policies and practices and implement certain information security policies and practices. Any violations of the GLBA could subject Barclays Bank Delaware to additional reporting requirements or regulatory investigation or audits by the financial regulators. More broadly, the Group's US operations are subject to the CPRA which applies to personal information that is not collected, processed, sold or disclosed subject to the GLBA. The CPRA requires applicable members of the Group to both provide California residents with additional disclosures regarding the collection, use and sharing of personal information and grant California residents access, deletion, correction and other rights, including the right to opt-out of certain sales or transfers of personal information and the right to limit the processing of sensitive personal information to certain purposes. Any violations of the CPRA may be subject Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 370 Supervision and regulation (continued) to enforcement by the California Privacy Protection Agency and the California Attorney General and the imposition of monetary penalties, as well as potential lawsuits arising from the private right of action provided to California residents in the case of certain data breaches. Bills proposed in the United States Congress and in the legislatures of various US states, if enacted, may have further impact on the data privacy practices of Barclays’ US operations. In addition, all 50 states have laws including obligations to provide notification of security breaches of computer databases that contain personal information to affected individuals, state officers and others. Cybersecurity and operational resilience Regulators globally continue to focus on cybersecurity risk management, organisational operational resilience and overall soundness across all financial services firms, with customer and market expectations of uninterrupted access to financial services remaining at an all-time high. The regulatory focus has been further heightened by the increasing number of high-profile ransomware and other supply chain attacks seen across the industry in recent years and the growing reliance of financial services on Cloud and other third party service providers. This is evidenced by the continuing introduction of new laws and regulatory frameworks directed at enhancing resilience of both firms and their critical third party providers. A new UK framework introduced in March 2021 requires firms to be able to remain within impact tolerances set for their important business services, in severe but plausible disruption scenarios such as a cyber attack, by no later than 31 March 2025. FSMA 2023 introduced a new regime for designated critical third party providers, and in 2023 the FCA and PRA issued a consultation on proposed rules and guidance for supervising the resilience of critical third party providers. The EU’s Digital Operational Resilience Act (DORA) entered into force in January 2023 and will apply in early 2025 (after a two- year implementation period), introducing comprehensive and sector specific regulation on Information Communication Technologies (ICT) incident reporting, testing and third party risk management, and providing for direct oversight of critical third party providers servicing the EU financial services sector. The existing and anticipated requirements for increased controls will serve to improve industry standardisation and resilience capabilities, enhancing our ability to deliver services during periods of potential disruption. However, such measures are likely to result in increased technology and compliance costs for the Group. In 2023, the SEC finalised disclosure rules regarding cybersecurity risk management, governance and incident reporting by US- listed companies, including foreign private issuers such as Barclays PLC and Barclays Bank PLC. The new rules require foreign private issuers to annually disclose the policies and procedures relied upon to identify and manage cybersecurity risks, including risk management strategy and whether any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect the issuer, its business strategy, results of operations or financial condition. In addition, Barclays PLC and Barclays Bank PLC must annually describe Barclays’ board of directors’ oversight of risks from cybersecurity threats, the board committee responsible for the oversight of such risks, and the processes by which the board or such committee is informed thereof; and details of management’s expertise and role in assessing and managing material risks from cybersecurity threats. If Barclays PLC or Barclays Bank PLC are required or determine to disclose material cybersecurity incidents under home country or stock exchange rules, they are required to also furnish this information with the SEC on the SEC's website, in accordance with their obligations as foreign private issuers. Similarly, NYDFS amended its cybersecurity regulation applying to the New York Branch of Barclays Bank PLC. The NYDFS's amended cybersecurity regulation contains significant updates, including enhanced notification requirements, cybersecurity governance obligations, and requirements applicable to cybersecurity policies and procedures (e.g., encryption and multi-factor authentication, business continuity and incident response plans, and vulnerability management). Regulatory initiatives on ESG disclosure The EU Regulation on Sustainable Finance Disclosures Regulation (SFDR) and related Delegated Regulations require financial market participants (FMPs) to disclose how they integrate environmental, social and governance factors in their investment decisions for certain financial products and to publish principal adverse impact statements. The SFDR applies to entities established in the EU and in-scope products marketed in the EU, regardless of the location of the entity. The SFDR is currently under review by the Commission. In addition, the EU Taxonomy Regulation provides for a general framework for the development of an EU-wide classification system for environmentally sustainable economic activities. It sets mandatory entity-level disclosure requirements for companies which fall under the scope of the EU Accounting Directive, in relation to eligibility and alignment of their business activities with the EU Taxonomy Regulation. The EU Taxonomy Regulation also imposes product level disclosure obligations for FMPs on the extent to which their financial products are Taxonomy aligned or not. The taxonomy, and with it the Taxonomy Regulation, is under review to include further sectors and, for example, social elements. The EU Corporate Sustainability Reporting Directive will introduce sustainability related reporting obligations for various entities, including EU banks and certain non-EU companies and banks (by virtue of having EU listings or significant business in the EU), with reporting to commence on a phased basis from the financial year 2024. Related technical sustainability reporting standards have been developed by the European Financial Reporting Advisory Group. The second EU Capital Requirements Regulation established, for certain large financial institutions, a Pillar 3 disclosure framework for information on environmental, social and governance risks, including physical risks and transition risks. Amendments proposed by the CRR III and CRD VI banking package will extend the scope of these disclosures and the emphasis on ESG. The ECB has made, and continues to regard, the supervision of the approach of institutions to ESG risk a priority. In December 2023, the European Council and Parliament institutions reached political agreement on the Directive on Corporate Sustainability Due Diligence, which will require EU firms, and certain non-EU firms, including financial institutions, to carry out due diligence with regard to their own operations and companies in their upstream value chain, in order to identify and prevent, bring to an end or mitigate the adverse impact of their activities on human rights and the environment. Firms will also be required to establish a climate change transition plan. These obligations are expected to come into force on a phased basis from the second half of 2027, at the earliest. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 371 Supervision and regulation (continued) In the UK, the FCA published final rules on the UK Sustainability Disclosure Requirements regime in November 2023 which set out new requirements to prepare sustainability-related product and entity level disclosures for certain firms, as well as a new sustainable investment labelling regime and anti-greenwashing rule applicable to all authorised firms. Currently, the new anti-greenwashing rule (and associated guidance) is due to apply from 31 May 2024, whilst the rest of the changes will take effect on a phased basis, beginning in the second half of 2024. The UK Government has expressed its intention to consider how best to incorporate the Taskforce on Nature- related Financial Disclosures framework for nature-related risk management and disclosures into UK legislation and to consult on introducing Transition Plan Taskforce Disclosure Framework (TPT Framework) related requirements for the UK’s largest companies. The Government is also progressing plans to endorse UK Sustainability Disclosure Standards based on the International Sustainability Standards Board (ISSB) sustainability reporting standards (IFRS S1 on general requirements for sustainability disclosures and IFRS S2 on climate disclosures) for use in the UK by July 2024. The FCA plans to consult in 2024 on incorporating provisions relating to the ISSB standards and TPT Framework into its Handbook. Additionally, TCFD-aligned reporting requirements apply to UK publicly quoted companies, large private companies and LLPs (in addition to existing TCFD-related reporting requirements under the Listing Rules). In the UK, the UK Government has confirmed its intention to develop a UK Green Taxonomy, and the Green Technical Advisory Group continues to publish advice and reports on the development of a Green Taxonomy. Reporting against the Taxonomy will form part of the UK’s new Sustainability Disclosure Requirements (SDR). Certain companies will be required to disclose which portion of their activities are Taxonomy-aligned. The structure of the Taxonomy is expected to draw on the EU approach and has six environmental objectives (climate change mitigation, climate change adaptation, sustainable use and protection of water and marine resources, transition to a circular economy, pollution prevention and control and protection and restoration of biodiversity). In March 2022, the SEC proposed climate related-disclosure requirements for US- listed companies (which would include Barclays PLC and Barclays Bank PLC) that would, among other things, require disclosure of direct and indirect greenhouse gas emissions, with certain emissions disclosures subject to third- party attestation requirements; climate- related scenario analysis (if the issuer conducts scenario analysis), together with qualitative and quantitative information about the hypothetical future climate scenarios used in its analysis; climate transition plans or climate-related targets or goals, along with disclosure of progress against any such plans, targets or goals; climate-related risks over the short-, medium- and long-term; qualitative and quantitative information regarding climate-related risks and historical impacts in audited financial statements; corporate governance of climate-related risks; and climate-related risk-management processes. In addition, bills proposed or adopted by the legislatures of certain US states may impose additional or stricter climate related-disclosure requirements on businesses operating in such US states. For example, in October 2023, California adopted the Climate Corporate Data Accountability Act (SB-253) and the Greenhouse Gases: Climate-Related Financial Risk bill (SB-261) which are expected to apply commencing in 2026. Barclays is monitoring such legislative developments and their impact on Barclays’ US operations and reporting obligations. Sanctions and financial crime The UK Bribery Act 2010 introduced a new form of corporate criminal liability focused broadly on a company’s failure to prevent bribery on its behalf. The Criminal Finances Act 2017 introduced new corporate criminal offences of failing to prevent the facilitation of UK and overseas tax evasion. In 2023, the Economic Crime and Corporate Transparency Act 2023 became law. This creates a new offence of failing to prevent a person associated with the Group from committing fraud for the benefit of the Group. These pieces of legislation have broad application and in certain circumstances may have extraterritorial impact on entities, persons or activities located outside the UK, including Barclays PLC’s subsidiaries outside the UK. The UK Bribery Act requires the Group to have adequate procedures to prevent bribery which, due to the extraterritorial nature of the Act, makes this both complex and costly. Additionally, the Criminal Finances Act requires the Group to have reasonable procedures in place to prevent the criminal facilitation of tax evasion by persons acting for, or on behalf of, the Group. The Economic Crime and Corporate Transparency Act similarly requires the Group to have reasonable procedures in place to prevent a person associated with the Group from committing fraud. The Sanctions and Anti-Money Laundering Act 2018 (the Sanctions Act) became law in the UK in 2018. Following the UK’s withdrawal from the EU, the Sanctions Act allowed for the adoption of an autonomous UK sanctions regime which came into force in 2021, as well as a more flexible licensing regime post-Brexit. This regime applies within the UK and in relation to the conduct of all UK persons wherever they are in the world; it also applies to overseas branches of UK companies (including the Barclays Bank PLC New York branch). Within the EU, there is a system of autonomous sanctions by which the European Council adopts a decision made by the EU’s Common Foreign and Security Policy. The measures stated in the Council decision are either implemented at the EU level, by way of Regulation, or at a national level in Member States. Regulations are binding and directly effective throughout the EU. Each measure will specify the territorial scope of the relevant sanctions but these can apply broadly within the territory of any EU Member States and to EU nationals wherever they are located as well as to third country branches of EU companies. The EU enforces its anti- money laundering regime through the Fourth Anti-Money Laundering Directive (EU) 2015/849 and the Fifth Anti-Money Laundering Directive (EU) 2018/849 with further changes being proposed through the Sixth Anti-Money Laundering Directive and a package of further reforms currently under discussion. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 372 Supervision and regulation (continued) In the US, the Bank Secrecy Act, the USA PATRIOT Act 2001, the Anti-Money Laundering Act of 2020 and regulations thereunder contain numerous anti-money laundering and anti-terrorist financing requirements for financial institutions. In addition, the Group is subject to the US Foreign Corrupt Practices Act, which prohibits, among other things, corrupt payments to foreign government officials. It is also subject to various economic sanctions laws, regulations and executive orders administered by the US government, which prohibit or restrict some or all business activities and other dealings with or involving certain individuals, entities, groups, countries and territories. In some cases, US state and federal regulations addressing sanctions, money laundering and other financial crimes may impact entities, persons or activities located or undertaken outside the US, including Barclays PLC and its subsidiaries. US government authorities have aggressively enforced these laws against financial institutions in recent years. As a result of the conflict in Ukraine, there has been an increased regulatory focus on sanctions compliance in various jurisdictions, including the US, UK and EU. Failure of a financial institution to ensure compliance with such laws could have serious legal, financial and reputational consequences for the institution. Financial review A review of the Group’s performance, including the key performance indicators, and the contribution of each of our businesses to the overall performance of the Group. Key performance indicators Consolidated summary income statement Income statement commentary Consolidated summary balance sheet Balance sheet commentary Analysis of results by business Non-IFRS performance measures 374 376 377 378 379 380 387 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 374 Key performance indicators In assessing the financial performance of the Group, management uses a range of KPIs which focus on the Group’s financial strength, the delivery of sustainable returns and cost management. KPIs reflect the targets and ambitions followed during 2023. On 20 February 2024, the Investor Update set out refreshed targets and ambitions which future progress will be measured against. Please see page 13 of the strategic report for further detail, or home.barclays/who-we-are/our-strategy/ Non-IFRS performance measures The Group’s management believes that the non-IFRS performance measures included in this document provide valuable information to the readers of the financial statements as they enable the reader to identify a more consistent basis for comparing the businesses’ performance between financial periods, and provide more detail concerning the elements of performance which the managers of these businesses are most directly able to influence or are relevant for an assessment of the Group. They also reflect an important aspect of the way in which operating targets are defined and performance is monitored by management. However, any non-IFRS performance measures in this document are not a substitute for IFRS measures and readers should consider the IFRS measures as well. Refer to the non-IFRS performance measures section for further information and calculations of non-IFRS performance measures included throughout this section and the most directly comparable IFRS measures. Definition Common Equity Tier 1 (CET1) ratio Capital requirements are part of the regulatory framework governing how banks and depository institutions are supervised. Capital ratios express a bank’s capital as a percentage of its Risk Weighted Assets (RWAs) as defined by the PRA. CET1 ratio is a measure of capital as defined within the Definition of Capital section of the PRA's Prudential and Resolution Policy - Banking Index. Return on average tangible shareholders’ equity (RoTE) RoTE is calculated as Group attributable profit, as a proportion of average tangible shareholders’ equity Why is it important and how the Group performed The Group’s capital management objective is to maximise shareholder value by prudently managing the level and mix of its capital to: ensure the Group and all of its subsidiaries are appropriately capitalised relative to their regulatory minimum and stressed capital requirements, support the Group’s risk appetite, growth and strategic options, while seeking to maintain a robust credit proposition for the Group and its subsidiaries. The CET1 ratio decreased to 13.8% (2022: 13.9%) as £4.3bn of attributable profit, including the negative impact of structural cost actions, was more than offset by returns to shareholders, impacts of regulatory change from 1 January 2023, the impact of KMC acquisition and movements in other capital deductions, as well as an increase in RWAs excluding the impact of foreign exchange movements, primarily driven by higher CIB and CC&P RWAs. An £8.2bn decrease in RWAs driven by foreign exchange movements was offset by a £1.1bn decrease in CET1 capital due to a decrease in the currency translation reserve within CET1. Group target: a CET1 ratio in the range of 13-14%. This measure indicates the return generated by the management of the business based on ordinary shareholders’ tangible equity. Achieving a target RoTE demonstrates the organisation’s ability to execute its strategy and align management’s interests with the shareholders’. RoTE lies at the heart of the Group’s capital allocation and performance management process. Statutory RoTE was 9.0% (2022: 10.4%) including £0.9bn of structural cost actions in Q423. Excluding Q423 structural cost actions, RoTE was 10.6%. Group target: RoTE of greater than 10%. CET1 ratio 13.8% 2022: 13.9% 2021: 15.1% Group RoTE 9.0% 2022: 10.4% 2021: 13.1% Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 375 Key performance indicators (continued) Definition Total operating expenses Cost: income ratio Total operating expenses divided by total income. Why is it important and how the Group performed Barclays views total operating expenses as a key strategic area for banks; those who actively manage costs and control them effectively will gain a strong competitive advantage. Group operating expenses increased to £16.9bn (2022: £16.7bn) reflecting £0.9bn of structural cost actions in Q423,bringing total structural cost actions for FY23 to £1.0bn (2022: £0.2bn), business growth and investments in resilience and controls partially offset by lower litigation and conduct charges. The prior year included £1.0bn of litigation and conduct charges related to the Over-issuance of Securities. This is a measure management uses to assess the productivity of the business operations. Managing the cost base is a key execution priority for management and includes a review of all categories of discretionary spending and an analysis of how we can run the business to ensure that costs increase at a slower rate than income. The Group cost: income ratio was 67% (2022: 67%). Excluding Q423 structural cost actions, Group cost: income ratio was 63% driven by increased income. Group target: a cost: income ratio below 60%. Total operating expenses £16.9bn 2022: £16.7bn 2021: £14.7bn Cost: income ratio 67% 2022: 67% 2021: 67% Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 376 Consolidated summary income statement For the year ended 31 December Interest income Interest expense Net interest income Fee and commission income Fee and commission expense Net fee and commission income Other income Total income Operating costs UK bank levy Litigation and conduct Total operating expenses Other net income Profit before impairment Credit impairment (charges)/releases Profit before tax Tax charge Profit after tax Non-controlling interests Other equity instrument holders Attributable profit Selected financial statistics Basic earnings per share Diluted earnings per share Return on average tangible shareholders’ equity Cost: income ratio 2023 £m 35,075 (22,366) 12,709 10,121 (3,592) 6,529 6,140 25,378 (16,714) (180) (37) (16,931) (9) 8,438 (1,881) 6,557 (1,234) 5,323 (64) (985) 4,274 27.7p 26.9p 9.0% 67% 2022 £m 19,096 (8,524) 10,572 9,637 (3,038) 6,599 7,785 24,956 (14,957) (176) (1,597) (16,730) 6 8,232 (1,220) 7,012 (1,039) 5,973 (45) (905) 5,023 30.8p 29.8p 10.4% 67% 2021 £m 11,240 (3,167) 8,073 9,880 (2,206) 7,674 6,193 21,940 2020 £m 11,892 (3,770) 8,122 8,641 (2,070) 6,571 7,073 21,766 (14,092) (13,434) (170) (397) (299) (153) (14,659) (13,886) 260 7,541 653 8,194 (1,138) 7,056 (47) (804) 6,205 36.5p 35.6p 13.1% 67% 23 7,903 (4,838) 3,065 (604) 2,461 (78) (857) 1,526 8.8p 8.6p 3.2% 64% 2019 £m 15,456 (6,049) 9,407 9,122 (2,362) 6,760 5,465 21,632 (13,359) (226) (1,849) (15,434) 71 6,269 (1,912) 4,357 (1,003) 3,354 (80) (813) 2,461 14.3p 14.1p 5.3% 71% The financial information above is extracted from the published accounts. This information should be read together with the information included in the accompanying consolidated financial statements. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 377 Income statement commentary 2023 compared to 2022 Barclays delivered a profit before tax of £6,557m (2022: £7,012m), RoTE of 9.0% (2022: 10.4%) and EPS of 27.7p (2022: 30.8p). Group income increased 2% to £25,378m primarily driven by the net benefit from the higher interest rate environment, including continued structural hedge income, and higher balances in US cards, partially offset by the non-repeat of the prior year income from hedging arrangements related to the Over-issuance of Securities and lower income in Global Markets and Investment Banking, Group total operating expenses increased to £16,931m (2022: £16,730m). Group operating expenses excluding litigation and conduct charges increased to £16,894m (2022: £15,133m) driven by: 1 in Q423 supporting the Group’s structural transformation and updated strategic priorities, • £927m of structural cost actions bringing total structural cost actions for FY23 to £1,046m (2022: £151m) • • the impact of business growth and the Kensington Mortgage Company (KMC) acquisition in Barclays UK, as well as investments in resilience and controls; the impact of inflation on the Group was more than offset by efficiency savings. Litigation and conduct charges decreased to £37m (2022: £1,597m). Prior year charges included £966m of costs related to the Over- issuance of Securities, £282m of customer remediation costs relating to legacy loan portfolios in CC&P and £165m related to the 2 . Devices Settlements Credit impairment charges were £1,881m (2022: £1,220m), driven by higher delinquencies in US cards, which was anticipated and led to higher coverage ratios. Total coverage ratio remains strong at 1.4% (December 2022: 1.4%). The effective tax rate (ETR) was 18.8% (2022: 14.8%). The 2023 ETR includes tax relief on payments made under Additional Tier 1 (AT1) instruments and on holdings of inflation-linked government bonds. Attributable profit was £4,274m (2022: £5,023m). Notes 1 To help drive future returns, Barclays has taken £0.9bn of structural cost actions in Q423. Structural cost actions include initiatives across people, property and infrastructure. 2 Refers to the settlements with the SEC and Commodity Futures Trading Commission (CFTC) in connection with their investigations of the use of unauthorised devices for business communications. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 378 Consolidated summary balance sheet As at 31 December Assets Cash and balances at central banks Cash collateral and settlement balances Debt securities at amortised cost Loans and advances at amortised cost to banks Loans and advances at amortised cost to customers Reverse repurchase agreements and other similar secured lending at amortised cost Trading portfolio assets Financial assets at fair value through the income statement Derivative financial instruments Financial assets at fair value through other comprehensive income Other assets Total assets Liabilities Deposits at amortised cost from banks Deposits at amortised cost from customers Cash collateral and settlement balances Repurchase agreements and other similar secured borrowings at amortised cost Debt securities in issue Subordinated liabilities Trading portfolio liabilities Financial liabilities designated at fair value Derivative financial instruments Other liabilities Total liabilities Equity Called up share capital and share premium Other equity instruments Other reserves Retained earnings Total equity excluding non-controlling interests Non-controlling interests Total equity Total liabilities and equity Net asset value per ordinary share Tangible net asset value per share Number of ordinary shares of Barclays PLC (in millions) Year-end USD exchange rate Year-end EUR exchange rate 2023 £m 2022 £m 2021 £m 2020 £m 2019 £m 224,634 108,889 56,749 9,459 333,288 2,594 174,605 206,651 256,836 71,836 31,946 1,477,487 14,472 524,317 94,084 41,601 96,825 10,494 58,669 297,539 250,044 17,578 1,405,623 4,288 13,259 (77) 53,734 71,204 660 71,864 1,477,487 382p 331p 15,155 1.28 1.15 256,351 112,597 45,487 10,015 343,277 776 133,813 213,568 302,380 65,062 30,373 238,574 92,542 31,831 9,698 191,127 101,367 23,805 8,900 150,258 83,256 17,752 9,624 319,922 309,927 311,739 3,227 147,035 191,972 262,572 61,753 25,159 9,031 127,950 175,151 302,446 78,688 21,122 3,379 114,195 133,086 229,236 65,750 21,954 1,513,699 1,384,285 1,349,514 1,140,229 19,979 525,803 96,927 27,052 112,881 11,423 72,924 271,637 289,620 16,193 17,819 501,614 79,371 28,352 98,867 12,759 54,169 250,960 256,883 13,450 17,343 463,693 85,423 14,174 75,796 16,341 47,405 249,765 300,775 11,917 15,402 400,385 67,341 14,517 76,369 18,156 36,916 204,326 229,204 11,953 1,444,439 1,314,244 1,282,632 1,074,569 4,373 13,284 (2,192) 52,827 68,292 968 69,260 4,536 12,259 1,770 50,487 69,052 989 70,041 4,637 11,172 4,461 45,527 65,797 1,085 66,882 4,594 10,871 4,760 44,204 64,429 1,231 65,660 1,513,699 1,384,285 1,349,514 1,140,229 347p 295p 339p 291p 315p 269p 309p 262p 15,871 16,752 17,359 17,322 1.20 1.13 1.35 1.19 1.37 1.11 1.32 1.18 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 379 Balance sheet commentary Total assets Total assets decreased £36.2bn to £1,477.5bn. Cash and balances at central banks decreased by £31.7bn to £224.6bn driven by lower customer deposits in Barclays UK reflecting the broader market trends. Debt securities at amortised cost increased by £11.3bn to £56.7bn and Financial assets at fair value through other comprehensive income increased £6.8bn to £71.8bn driven by increased investment in debt securities in Barclays International. Loans and advances at amortised cost to banks and customers decreased £10.5bn to £342.7bn driven by loan repayments across Barclays International and Barclays UK. Trading portfolio assets increased £40.8bn to £174.6bn driven by an increase in debt and equity securities as we facilitate client demand in Barclays International. Derivative financial instrument assets decreased £45.5bn to £256.8bn, driven by lower market volatility and a decrease in the forward interest rates. Cash collateral and settlement balances decreased by £3.7bn to £108.9bn. Financial assets at fair value through the income statement decreased £6.9bn to £206.7bn driven by increased secured lending being more than offset by trade optimisations. Total liabilities Total liabilities decreased £38.8bn to £1,405.6bn. Deposits at amortised cost to banks and customers decreased £7.0bn to £538.8bn driven by a reduction in customer deposits reflecting broader market trends in Barclays UK, partially offset by an increase in short-term money market deposits and growth in customer deposits in Barclays International. Repurchase agreements and other similar secured borrowing at amortised cost increased £14.5bn to £41.6bn driven by increased secured borrowing. Debt securities in issue decreased £16.1bn to £96.8bn driven by maturities. Derivative financial instrument liabilities decreased £39.6bn to £250.0bn driven by lower market volatility. Cash collateral and settlement balances decreased by £2.8bn to £94.1bn. Trading portfolio liabilities decreased £14.3bn to £58.7bn driven by decreases in equity securities as clients repositioned their demand. Financial liabilities designated at fair value increased £25.9bn to £297.5bn driven by increased repurchase agreements and prime brokerage deposits. Total shareholders’ equity Total shareholders’ equity increased £2.6bn to £71.9bn. Other equity instruments remained at £13.3bn as the issuance of three AT1 instruments (£1.50bn, $1.8bn and SGD400m) was offset by two redemptions (£1.3bn and $2.5bn). AT1 securities are perpetual subordinated contingent convertible securities structured to qualify as AT1 instruments under prevailing capital rules applicable as at the relevant issue date. Other reserves increased by £2.1bn, mainly due to an increase in the cash flow hedging reserve of £3.5bn to £3.7bn debit, as a result of fair value movements on interest rate swaps held for hedging purposes due to an decrease in major interest rate curves. This was partially offset by an decrease in the currency translation reserve of £1.1bn to £3.7bn, driven by the appreciation of GBP against USD. Retained earnings increased £0.9bn to £53.7bn, mainly due to profits of £4.3bn, offset by share repurchases of £1.3bn and dividends of £1.2bn. Tangible net asset value per share increased to 331p (December 2022: 295p) including: EPS of 27.7p, positive cash flow hedge reserve movements of 22p, and 8p from the reduction in share count following share buybacks of £1.25bn completed in 2023. This was partially offset by an 8p reduction from dividends paid during 2023 and net negative other reserve movements. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 380 Analysis of results by business Barclays UK Income statement information Net interest income Net fee, commission and other income Total income Operating costs UK bank levy Litigation and conduct Total operating expenses Other net income Profit before impairment Credit impairment (charges)/releases Profit before tax Attributable profit Balance sheet information Loans and advances to customers at amortised cost Total assets Customer deposits at amortised cost Loan: deposit ratio Risk weighted assets Period end allocated tangible equity Key facts UK mortgage balances Mortgage gross lending flow 1 Average LTV of mortgage portfolio 1 Average LTV of new mortgage lending Number of branches Mobile banking active customers 30 day arrears rate - Barclaycard Consumer UK Number of employees (full time equivalent) Performance measures Return on average allocated tangible equity Average allocated tangible equity Cost: income ratio Loan loss rate (bps) Net interest margin Note 2023 £m 6,431 1,156 7,587 (4,393) (30) 8 (4,415) — 3,172 (304) 2,868 1,962 £202.8bn £293.1bn £241.1bn 92% £73.5bn £10.2bn £160.9bn £22.7bn 54% 63% 306 11.0m 0.9% 6,800 19.2% £10.2bn 58% 14 3.13% 2022 £m 5,893 1,366 7,259 2021 £m 5,202 1,334 6,536 (4,260) (4,357) (26) (41) (36) (37) (4,327) (4,430) — 2,932 (286) 2,646 1,877 — 2,106 365 2,471 1,756 £205.1bn £313.2bn £258.0bn 87% £73.1bn £10.1bn £208.8bn £321.2bn £260.6bn 85% £72.3bn £10.0bn £162.2bn £30.3bn £158.1bn £33.9bn 50% 68% 481 10.5m 0.9% 6,200 18.7% £10.0bn 60% 13 2.86% 51% 70% 666 9.7m 1.0% 7,100 17.6% £10.0bn 68% (16) 2.52% 1 Average loan to value (LTV) of mortgages is balance weighted and reflects both residential and buy-to-let (BTL) mortgage portfolios within the Home Loans portfolio. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 381 Analysis of results by business (continued) Analysis of Barclays UK Analysis of total income Personal Banking Barclaycard Consumer UK Business Banking Total income Analysis of credit impairment (charges)/releases Personal Banking Barclaycard Consumer UK Business Banking Total credit impairment (charges)/releases Analysis of loans and advances to customers at amortised cost Personal Banking Barclaycard Consumer UK Business Banking Total loans and advances to customers at amortised cost Analysis of customer deposits at amortised cost Personal Banking Barclaycard Consumer UK Business Banking Total customer deposits at amortised cost 2023 compared to 2022 2023 £m 4,729 964 1,894 7,587 (170) (162) 28 (304) £170.1bn £9.7bn £23.0bn £202.8bn £185.4bn — £55.7bn £241.1bn 2022 £m 4,540 1,093 1,626 7,259 (167) 30 (149) (286) 2021 £m 3,883 1,250 1,403 6,536 28 404 (67) 365 £169.7bn £165.4bn £9.2bn £26.2bn £8.7bn £34.7bn £205.1bn £208.8bn £195.6bn £196.4bn — £62.4bn £258.0bn — £64.2bn £260.6bn Profit before tax increased 8% to £2,868m with a RoTE of 19.2% (2022: 18.7%). Total income increased 5% to £7,587m. Net interest income increased 9% to £6,431m with a net interest margin of 3.13% (2022: 2.86%), as higher interest rates and associated structural hedge benefit outweighed mortgage margin pressure and adverse deposit dynamics reflecting wider market trends. Net fee, commission and other income decreased 15% to £1,156m including the impact of the transfer of WM&I to CC&P. • Personal Banking income increased 4% to £4,729m, driven by higher interest rates, partially offset by mortgage margin compression and movements in deposit volumes and mix resulting from cost of living pressures and customers searching for yield. • Barclaycard Consumer UK income decreased 12% to £964m as higher customer spend volumes were more than offset by lower interest earning lending balances following repayments and ongoing prudent risk management. • Business Banking income increased 16% to £1,894m driven by higher interest rates, partially offset by lower government scheme lending as repayments continue and lower deposit volumes. Total operating expenses increased 2% to £4,415m, including £168m impact from Q423 structural cost actions. Excluding the impact of Q423 structural cost actions, operating expenses decreased 2%, driven by the transfer of WM&I to CC&P partially offset by the impact of inflation and the acquisition of KMC. Ongoing efficiency savings continue to be reinvested, including in our transformation programme to support sustainable improvement to the cost: income ratio over the longer term. Credit impairment charges increased to £304m (2022: £286m), consistent with low delinquencies in UK cards and a high quality mortgage lending portfolio. UK cards 30 and 90 day arrears remained low at 0.9% (Q422: 0.9%) and 0.2% (Q422: 0.2%) respectively. The UK cards total coverage ratio was 6.8% (December 2022: 7.6%). Loans and advances to customers at amortised cost decreased by 1% to £202.8bn (December 2022: £205.1bn), primarily reflecting continued repayment of government scheme lending in Business Banking, subdued mortgage lending amid lower market demand, partially offset by the acquisition of KMC. Customer deposits at amortised cost decreased 7% to £241.1bn (December 2022: £258.0bn). Primarily driven by reduced current account balances in Personal and Business Banking, reflecting broader market trends. The loan: deposit ratio increased to 92% (December 2022: 87%). RWAs increased to £73.5bn (December 2022: £73.1bn), primarily due to the acquisition of KMC, broadly offset by reduction across lending portfolios. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 382 Analysis of results by business (continued) Barclays International Income statement information Net interest income Net trading income Net fee, commission and other income Total income Operating costs UK bank levy Litigation and conduct Total operating expenses Other net (expenses)/income Profit before impairment Credit impairment (charges)/releases Profit before tax Attributable profit Balance sheet information Loans and advances to customers at amortised cost Loans and advances to banks at amortised cost Debt securities at amortised cost Loans and advances at amortised cost Trading portfolio assets Derivative financial instrument assets Financial assets at fair value through the income statement Cash collateral and settlement balances Other assets Total assets Deposits at amortised cost Derivative financial instrument liabilities Loan: deposit ratio Risk weighted assets Period end allocated tangible equity Key facts Number of employees (full time equivalent) Performance measures Return on average allocated tangible equity Average allocated tangible equity Cost: income ratio Loan loss rate (bps) Net interest margin 2023 £m 6,197 5,878 5,843 17,918 (11,578) (136) (47) (11,761) (2) 6,155 (1,548) 4,607 3,025 £126.8bn £8.4bn £39.0bn £174.2bn £174.6bn £255.2bn £203.7bn £103.6bn £254.8bn £1,166.1bn £297.7bn £249.8bn 58% £259.1bn £37.6bn 2022 £m 4,927 7,709 5,231 17,867 (10,361) (133) (1,503) (11,997) 28 5,898 (933) 4,965 3,844 2021 £m 3,263 5,693 6,709 15,665 (9,076) (134) (345) (9,555) 40 6,150 288 6,438 4,647 £133.7bn £106.4bn £8.7bn £27.2bn £169.6bn £133.8bn £301.7bn £210.5bn £107.7bn £258.0bn £8.4bn £19.0bn £133.8bn £146.9bn £261.5bn £188.2bn £88.1bn £225.6bn £1,181.3bn £1,044.1bn £287.6bn £288.9bn 59% £254.8bn £36.8bn £258.8bn £256.4bn 52% £230.9bn £33.2bn 12,400 10,900 10,400 8.2% £37.0bn 66% 87 5.78% 10.2% £37.6bn 67% 54 5.02% 14.4% £32.4bn 61% (21) 4.01% Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 383 Analysis of results by business (continued) Analysis of Barclays International Corporate and Investment Bank Income statement information Net interest income Net trading income Net fee, commission and other income Total income Operating costs UK bank levy Litigation and conduct Total operating expenses Other net (expenses)/income Profit before impairment Credit impairment (charges)/releases Profit before tax Attributable profit Balance sheet information Loans and advances to customers at amortised cost Loans and advances to banks at amortised cost Debt securities at amortised cost Loans and advances at amortised cost Trading portfolio assets Derivative financial instrument assets Financial assets at fair value through the income statement Cash collateral and settlement balances Other assets Total assets Deposits at amortised cost Derivative financial instrument liabilities Risk weighted assets Performance measures Return on average allocated tangible equity Average allocated tangible equity Cost: income ratio Loan loss rate (bps) Analysis of total income FICC Equities Global Markets Advisory Equity capital markets Debt capital markets Investment Banking fees Corporate lending Transaction banking Corporate Total income 2023 £m 2,551 6,056 4,003 12,610 (8,335) (129) 6 (8,458) (3) 4,149 (23) 4,126 2,667 £87.8bn £7.4bn £38.9bn £134.1bn £174.5bn £255.1bn £203.6bn £102.9bn £205.4bn £1,075.6bn £217.7bn £249.7bn £216.8bn 8.4% £31.7bn 67% 2 4,845 2,373 7,218 593 219 1,148 1,960 475 2,957 3,432 12,610 2022 £m 1,949 7,733 3,686 13,368 (7,630) (126) (1,189) (8,945) 2 4,425 (119) 4,306 3,364 £90.5bn £8.1bn £27.2bn £125.8bn £133.7bn £301.6bn £210.5bn £106.9bn £222.6bn £1,101.1bn £205.8bn £288.9bn £215.9bn 10.2% £32.8bn 67% 9 5,695 3,149 8,844 768 166 1,281 2,215 (231) 2,540 2,309 2021 £m 1,351 5,652 5,331 12,334 (6,818) (128) (237) (7,183) 2 5,153 473 5,626 4,032 £73.4bn £7.6bn £19.0bn £100.0bn £146.7bn £261.5bn £188.1bn £87.2bn £195.8bn £979.3bn £189.4bn £256.4bn £200.7bn 14.3% £28.3bn 58% (47) 3,448 2,967 6,415 921 813 1,925 3,659 588 1,672 2,260 13,368 12,334 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 384 Analysis of results by business (continued) Analysis of Barclays International continued Consumer, Cards and Payments Income statement information Net interest income Net fee, commission, trading and other income Total income Operating costs UK bank levy Litigation and conduct Total operating expenses Other net income Profit before impairment Credit impairment charges Profit before tax Attributable profit Balance sheet information Loans and advances to customers at amortised cost Total assets Deposits at amortised cost Risk weighted assets Key facts US cards 30 day arrears rate US cards customer FICO score distribution <660 >660 Total number of payments clients 1 Value of payments processed Performance measures Return on average allocated tangible equity Average allocated tangible equity Cost: income ratio Loan loss rate (bps) Analysis of total income International Cards and Consumer Bank Private Bank Payments Total income Note 1 Includes £311bn (2022: £296bn; 2021: £270bn) of merchant acquiring payments. 2023 £m 3,646 1,662 5,308 (3,243) (7) (53) (3,303) 1 2,006 (1,525) 481 358 £39.0bn £90.5bn £80.0bn £42.3bn 2.9% 12% 88% 402k £324bn 6.7% £5.3bn 62% 354 3,569 1,190 549 5,308 2022 £m 2,979 1,520 4,499 (2,731) (7) (314) (3,052) 26 1,473 (814) 659 480 2021 £m 1,912 1,419 3,331 (2,258) (6) (108) (2,372) 38 997 (185) 812 615 £43.2bn £80.2bn £81.8bn £38.9bn £33.0bn £64.8bn £69.4bn £30.2bn 2.2% 1.6% 11% 89% 395k 10% 90% 380k £307bn £277bn 10.0% £4.8bn 68% 175 2,913 1,014 572 4,499 15.0% £4.1bn 71% 51 2,092 781 458 3,331 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 385 Analysis of results by business (continued) 2023 compared to 2022 Barclays International RoTE was 8.2% (2022: 10.2%) with a profit before tax of £4,607m (2022: £4,965m) including £306m (CIB: £188m, CC&P: £118m) of Q423 structural cost actions. CIB delivered a RoTE of 8.4% (2022: 10.2%) and CC&P 6.7% (2022: 10.0%) • Total income was broadly flat at £17,918m, prior year included a £292m income impact from hedging arrangements related to the Over-issuance of securities • Total operating expenses decreased 2% to £11,761m including £306m of structural cost actions in Q423. Prior year included £966m of litigation and conduct charges relating to the Over-issuance of securities Excluding the impact of Q423 structural cost actions and the Over-issuance of Securities in the prior year1: Total income increased to £17,918m (2022: £17,575m) CIB income decreased 4% to £12,610m (2022: £13,076m) 2 . FICC income decreased 15% to • Global Markets income decreased 16% to £7,218m against a record prior year comparative £4,845m, reflecting lower market volatility and client activity. Equities income decreased 17% to£2,373m, driven by a decline in derivatives income reflecting less volatile equity market conditions. • 3 . Advisory decreased 23% and Investment Banking fees decreased 12% to £1,960m due to the reduced fee pool across the industry Debt capital markets decreased 10%, while Equity capital markets increased 32% • Within Corporate, Transaction banking income increased 16% to £2,957m driven by improved deposit margins in the higher interest rate environment with stable deposit balances. Corporate lending income increased to £475m (2022: £231m loss) mainly driven by lower costs of hedging and lower fair value losses on leverage finance lending net of mark to market gains on related hedges. CC&P income increased 18% to £5,308m. • International Cards and Consumer Bank income increased 23% to £3,569m reflecting higher cards balances and improved margins, including the Gap Inc. portfolio acquisition in Q222. • Private Bank income increased 17% to £1,190m, due to the transfer of WM&I from Barclays UK, client balance growth and improved deposits margin in the higher rate environment. • Payments income decreased 4% to £549m driven by margin compression. Total operating expenses increased 4% to £11,455m • CIB total operating expenses increased 4% to £8,270m, reflecting investment in talent and technology, and the impact of inflation, 4 partially offset by the non-repeat of prior year litigation and conduct charges mainly relating to Device Settlements and efficiency savings • CC&P total operating expenses increased 4% to £3,185m, driven by higher investment spend to support growth, mainly in marketing and partnership costs, the transfer of WM&I from Barclays UK, and the impact of inflation, partially offset by the non-repeat of prior year litigation and conduct charges mainly relating to customer remediation costs and efficiency savings Credit impairment charges were £1,548m (2022: £933m). • CIB credit impairment charges were £23m (2022: £119m), driven by single name charges, partially offset by the benefit of credit protection. • CC&P credit impairment charges increased to £1,525m (2022: £814m), driven by higher delinquencies in US cards, which was anticipated and led to higher coverage ratios. 30 and 90 day arrears at 2.9% (Q422: 2.2%) and 1.5% (Q422: 1.2%) respectively. The US cards total coverage ratio was 10.2% (December 2022: 8.1%). Loans and advances at amortised cost increased £4.6bn to £174.2bn driven by increased investment in debt securities in Treasury. In addition, there has been balance growth in CC&P which was offset by net loan repayments in CIB and transfer to held for sale of the German consumer finance business. Trading portfolio assets increased £40.8bn to £174.6bn driven by an increase in debt and equity securities as we facilitate client demand in Global Markets. Derivative assets and liabilities decreased £46.5bn and £39.1bn to £255.2bn and £249.8bn respectively reflecting lower market volatility and a decrease in the forward interest rates. Financial assets at fair value through the income statement decreased £6.8bn to £203.7bn driven by increased secured lending which was more than offset by trade optimisations. Deposits at amortised cost increased £10.1bn to £297.7bn driven by increased deposits in CIB. RWAs increased to £259.1bn (December 2022: £254.8bn) driven by higher CC&P RWAs. Notes 1 The Over-issuance of Securities in the prior year impacted Equities within Global markets, CIB and Barclays International only. 2 Period covering 2014-2023. Pre 2014 data was not restated following re-segmentation in 2016. 3 Data source: Dealogic for the period covering 1 January to 31 December 2023. 4 Refers to the settlements with the SEC and CFTC in connection with their investigations of the use of unauthorised devices for business communications. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 386 Analysis of results by business (continued) Head Office Income statement information Net interest income Net fee, commission and other income Total income Operating costs UK bank levy Litigation and conduct Total operating expenses Other net (expenses)/income Loss before impairment Credit impairment charges Loss before tax Attributable loss Balance sheet information Total assets Risk weighted assets Period end allocated tangible equity Key facts Number of employees (full time equivalent) 1, 2 Performance measures Average allocated tangible equity Notes 2023 £m 81 (208) (127) (743) (14) 2 (755) (7) (889) (29) (918) (713) £18.3bn £10.2bn £2.3bn 73,200 £0.2bn 2022 £m (248) 78 (170) (336) (17) (53) (406) (22) (598) (1) (599) (698) 2021 £m (392) 131 (261) (659) — (15) (674) 220 (715) — (715) (198) £19.2bn £8.6bn £(0.2)bn £19.0bn £11.0bn £5.5bn 70,300 64,100 £0.7bn £5.0bn 1 Head Office includes employees in Barclays Execution Services. 2 Barclays Execution Services Employees are reported within the Head Office Segment. Barclays UK transformed its business in 2021 and consolidated all Customer Care employees, who directly serve customers, into Barclays Execution Services to improve customer service and experience. Costs are recharged, while FTEs are reported within Head Office, as at 31 December 2021 10,700 FTEs were impacted by the move from Barclays UK to Head Office. 2023 compared to 2022 Loss before tax was £918m (2022: £599m), including £453m Q423 structural cost actions. Total income was an expense of £127m (2022: £170m) primarily reflecting hedge accounting and treasury items. Total operating expenses increased to £755m (2022: £406m) primarily driven by £453m of Q423 structural cost actions partially offset by lower litigation and conduct charges. • Head Office structural cost actions principally include the software intangibles impairment related to the merchant acquiring business (c.£260m), and the Canary Wharf office lease exit (c.£140m). RWAs were £10.2bn (December 2022: £8.6bn) primarily driven by methodology and policy updates, and increases in non-customer assets. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 387 Non-IFRS performance measures The Group’s management believes that the non-IFRS performance measures included in this document provide valuable information to the readers of the financial statements as they enable the reader to identify a more consistent basis for comparing the businesses’ performance between financial periods, and provide more detail concerning the elements of performance which the managers of these businesses are most directly able to influence or are relevant for an assessment of the Group. They also reflect an important aspect of the way in which operating targets are defined and performance is monitored by management. However, any non-IFRS performance measures in this document are not a substitute for IFRS measures and readers should consider the IFRS measures as well. Non-IFRS performance measures glossary Measure Loan: deposit ratio Definition Total loans and advances at amortised cost divided by total deposits at amortised cost. The components of the calculation have been included on page 343. Profit after tax attributable to ordinary shareholders of the parent. Attributable profit Period end tangible equity refers to: Period end tangible shareholders' equity (for Barclays Group) Period end allocated tangible equity (for businesses) Shareholders' equity attributable to ordinary shareholders of the parent, adjusted for the deduction of intangible assets and goodwill. Allocated tangible equity is calculated as 13.5% (2022: 13.5%, 2021: 13.5%) of RWAs for each business, adjusted for capital deductions, excluding goodwill and intangible assets, reflecting the assumptions the Barclays Group uses for capital planning purposes. Head Office allocated tangible equity represents the difference between the Barclays Group’s tangible shareholders’ equity and the amounts allocated to businesses. Average tangible equity refers to: Average tangible shareholders’ equity (for Barclays Group) Average allocated tangible equity (for businesses) Calculated as the average of the previous month’s period end tangible shareholders' equity and the current month’s period end tangible shareholders' equity. The average tangible shareholders’ equity for the period is the average of the monthly averages within that period. Calculated as the average of the previous month’s period end allocated tangible equity and the current month’s period end allocated tangible equity. The average allocated tangible equity for the period is the average of the monthly averages within that period. Return on tangible equity (RoTE) refers to: Return on average tangible shareholders’ equity (for Barclays Group) Return on average allocated tangible equity (for businesses) Group attributable profit, as a proportion of average tangible shareholders’ equity. The components of the calculation have been included on pages 389. Business attributable profit, as a proportion of that business's average allocated tangible equity. The components of the calculation have been included on page 389. Operating expenses excluding litigation and conduct Operating costs Cost: income ratio Loan loss rate Net interest margin Tangible net asset value per share Profit before impairment Structural cost actions Performance measures excluding the impact of Q423 structural cost actions Performance measures excluding the impact of the Over-issuance of Securities A measure of total operating expenses excluding litigation and conduct charges. A measure of total operating expenses excluding litigation and conduct charges and UK bank levy. Total operating expenses divided by total income. Quoted in basis points and represents total impairment charges divided by total gross loans and advances held at amortised cost at the balance sheet date. Net interest income divided by the sum of average customer assets. The components of the calculation have been included on page 388. Calculated by dividing shareholders’ equity, excluding non-controlling interests and other equity instruments, less goodwill and intangible assets, by the number of issued ordinary shares. The components of the calculation have been included on page 393. Calculated by excluding credit impairment charges or releases from profit before tax. Cost actions taken to improve future financial performance. Calculated by excluding the impact of Q423 structural cost actions from performance measures. The components of the calculations for Barclays Group and businesses have been included on page 390 and page 392 respectively. Calculated by excluding the impact of the Over-issuance of Securities from performance measures. The components of the calculations for Barclays Group and businesses have been included on pages 390 to 392 respectively. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 388 Non-IFRS performance measures (continued) Margins analysis For the year ended 31 December Barclays UK Corporate and Investment Bank Consumer, Cards and Payments Barclays International Total Barclays Group 1 Other Total Barclays Group net interest income Note Net interest income 2023 Average customer assets Net interest margin Net interest income 2022 Average customer assets Net interest margin Net interest income 2021 Average customer assets Net interest margin £m £m % £m £m % £m £m % 6,431 205,667 1,991 54,600 3,646 42,910 5,637 97,510 12,068 303,177 641 12,709 2,979 5,893 1,796 3.13 3.65 8.50 5.78 4,775 3.98 10,668 (96) 10,572 205,972 56,008 39,193 95,201 301,173 2.86 3.21 7.60 5.02 3.54 5,202 1,238 206,628 47,725 1,911 30,805 3,149 78,530 8,351 285,158 2.52 2.59 6.21 4.01 2.93 (278) 8,073 1 Other comprises net interest income from Markets within Barclays International and Head Office including hedge accounting. The Barclays Group NIM has increased 44bps from 3.54% to 3.98% in 2023, driven by the higher interest rate environment and continued structural hedge income momentum across the Group as well as higher balances in CC&P including the Gap Inc. portfolio acquisition, partially offset by product dynamics in deposits and mortgages. The Group’s combined product and equity structural hedge notional as at 31 December 2023 was £246bn (December 2022: £263bn), with an average duration of close to 2.5 years. Gross structural hedge contributions of £3,623m (2022: £2,196m) and net structural hedge contributions of £(8,209)m (2022: £(1,544)m) are included in Group net interest income. Gross structural hedge contributions represent the absolute interest income earned from the fixed receipts on the swaps in the structural hedge, while the net structural hedge contributions represent the net interest earned on the difference between the structural hedge rate and prevailing floating rates. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 389 Non-IFRS performance measures (continued) Returns Return on average tangible equity Attributable profit/(loss) Average equity Average goodwill and intangibles Average tangible equity For the year ended 31 December 2023 Barclays UK Corporate and Investment Bank Consumer, Cards and Payments Barclays International Head Office Barclays Group £m 1,962 £m 2,667 £m 358 £m 3,025 £m (713) £m 4,274 £14.0bn £(3.8)bn £10.2bn £31.7bn — £31.7bn £6.1bn £(0.8)bn £5.3bn £37.8bn £(0.8)bn £37.0bn £4.0bn £(3.8)bn £0.2bn £55.8bn £(8.4)bn £47.4bn Return on average tangible equity 19.2% 8.4% 6.7% 8.2% n/m 9.0% Barclays Group average tangible shareholder's equity based on a CET1 ratio of 13.5% Return on average tangible equity Attributable profit/(loss) Average equity Average goodwill and intangibles Average tangible equity Barclays UK £m 1,877 £13.6bn (£3.6bn) £10.0bn £m 3,364 £32.8bn — £32.8bn For the year ended 31 December 2022 Corporate and Investment Bank Consumer, Cards and Payments Barclays International £m 480 £m 3,844 £46.5bn Head Office Barclays Group £m (698) £m 5,023 £5.7bn (£0.9bn) £4.8bn £38.5bn (£0.9bn) £37.6bn £4.3bn (£3.6bn) £0.7bn £56.4bn (£8.1bn) £48.3bn Return on average tangible equity 18.7% 10.2% 10.0% 10.2% n/m 10.4% Return on average tangible equity Attributable profit/(loss) Average equity Average goodwill and intangibles Average tangible equity For the year ended 31 December 2021 Barclays UK Corporate and Investment Bank Consumer, Cards and Payments Barclays International Head Office Barclays Group £m 1,756 £m 4,032 £m 615 £m 4,647 £m (198) £m 6,205 £13.6bn (£3.6bn) £10.0bn £28.3bn — £28.3bn £4.8bn (£0.7bn) £4.1bn £33.1bn (£0.7bn) £32.4bn £8.7bn (£3.7bn) £5.0bn £55.4bn (£8.1bn) £47.3bn Return on average tangible equity 17.6% 14.3% 15.0% 14.4% n/m 13.1% Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 390 Non-IFRS performance measures (continued) Reconciliation of financial results excluding adjusting items1 For the year ended 31 December 2023 For the year ended 31 December 2022 Barclays UK Corporate and Investment Bank Consumer, Cards and Payments Barclays International Head Office Total income Barclays UK Corporate and Investment Bank Consumer, Cards and Payments Barclays International Head Office Total operating costs UK bank levy Litigation and conduct Total operating expenses Other net (expenses)/income Profit before impairment Credit impairment charges Profit before tax Attributable profit Average tangible shareholders' equity Return on average tangible shareholders' equity Cost: income ratio Statutory Adjusting items1 £m 7,587 12,610 5,308 17,918 (127) 25,378 £m — — — — — — Excluding adjusting items £m 7,587 Statutory £m 7,259 12,610 13,368 5,308 17,918 (127) 25,378 4,499 17,867 (170) 24,956 (4,393) (168) (4,225) (4,260) Adjusting items1 Excluding adjusting items £m % Change £m — 292 — 292 — 292 — — — 7,259 13,076 4,499 17,575 (170) 24,664 (4,260) (7,630) (2,731) (8,335) (3,243) (11,578) (743) (16,714) (180) (37) (16,931) (9) 8,438 (1,881) 6,557 4,274 £47.4bn 9.0% 67% (188) (118) (306) (453) (927) — — (927) — (927) (8,147) (3,125) (7,630) (2,731) (11,272) (10,361) — (10,361) (290) (336) — (336) (15,787) (14,957) — (14,957) (180) (176) — (176) (37) (16,004) (1,597) (16,730) (9) 9,365 6 8,232 (966) (966) — (674) (631) (15,764) 6 8,906 — (1,881) (1,220) — (1,220) (927) (739) 7,484 5,013 7,012 5,023 (674) (552) 7,686 5,575 £47.4bn £48.3bn 10.6% 10.4% 63% 67% £48.3bn 11.6% 64% 5 (4) 18 2 25 3 1 (7) (14) (9) 14 (6) (2) 94 (2) 5 (54) (3) (10) Note 1 Adjusting items: Q423 structural cost actions in 2023 and impact of Over-issuance of Securities in 2022 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 391 Non-IFRS performance measures (continued) Performance measures excluding the impact of Q423 structural cost actions Total operating expenses Q423 structural cost actions Total operating expenses excluding Q423 structural cost actions For the year ended 31 December 2023 Barclays UK Corporate and Investment Bank Consumer, Cards and Payments Barclays International Head Office Barclays Group £m £m £m £m (4,415) (168) (4,247) (8,458) (188) (8,270) (3,303) (118) (3,185) (11,761) (306) (11,455) £m (755) (453) (302) £m (16,931) (927) (16,004) Total income 7,587 12,610 5,308 17,918 (127) 25,378 Cost: income ratio excluding Q423 structural cost actions 56% 66% 60% 64% n/m 63% Profit before tax Pre-tax impact of Q423 structural cost actions Profit/(loss) before tax excluding Q423 structural cost actions Attributable profit/(loss) Post-tax impact of Q423 structural cost actions Attributable profit/(loss) excluding the impact of Q423 structural cost actions 2,868 (168) 3,036 1,962 (122) 2,084 4,126 (188) 4,314 2,667 (140) 2,807 481 (118) 599 358 (100) 458 4,607 (306) 4,913 3,025 (240) 3,265 (918) (453) (465) (713) (376) (337) 6,557 (927) 7,484 4,274 (739) 5,013 Average tangible equity £10.2bn £31.7bn £5.3bn £37.0bn £0.2bn £47.4bn Return on average tangible equity excluding Q423 structural cost actions 20.4% 8.9% 8.6% 8.8% n/m 10.6% Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 392 Non-IFRS performance measures (continued) Reconciliation of financial results excluding adjusting items1 For the year ended 31 December 2023 For the year ended 31 December 2022 Statutory Adjusting items1 Excluding adjusting items Statutory Adjusting items1 Excluding adjusting items £m £m £m £m £m £m % change Income Corporate and Investment Bank 12,610 — 12,610 13,368 292 13,076 (4) of which: FICC Equities Global Markets Consumer, Cards and Payments Barclays International Total operating expenses Corporate and Investment Bank Consumer, Cards and Payments Barclays International 4,845 2,373 7,218 5,308 17,918 — — — — — 4,845 2,373 7,218 5,308 5,695 3,149 8,844 4,499 17,918 17,867 — 292 292 — 292 5,695 2,857 8,552 4,499 17,575 (8,458) (3,303) (11,761) (188) (118) (306) (8,270) (8,945) (3,185) (11,455) (3,052) (11,997) (966) — (966) (7,979) (3,052) (11,031) (15) (17) (16) 18 2 (4) (4) (4) Note 1 Adjusting items: Q423 structural cost actions in 2023 and impact of Over-issuance of Securities in 2022. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 393 Non-IFRS performance measures (continued) Tangible net asset value per share Total equity excluding non-controlling interests Other equity instruments Goodwill and intangibles Tangible shareholders’ equity attributable to ordinary shareholders of the parent Shares in issue Tangible net asset value per share 2023 £m 71,204 (13,259) (7,794) 50,151 2022 £m 68,292 (13,284) (8,239) 46,769 2021 £m 69,052 (12,259) (8,061) 48,732 15,155m 15,871m 16,752m 331p 295p 291p Financial statements Detailed analysis of our statutory accounts, independently audited and providing in-depth disclosure on the financial performance of the Group. Barclays has adopted the British Bankers’ Association (BBA) Code for Financial Reporting Disclosure as adopted by UK Finance in 2017 and has prepared the 2023 Annual Report in compliance with the BBA Code. Barclays is committed to continuously reflect the objectives of reporting set out in the BBA Code. Consolidated financial statements Notes to the financial statements Financial performance and returns Independent Auditor’s Report Consolidated income statement Consolidated statement of comprehensive income Consolidated balance sheet Consolidated statement of changes in equity Consolidated cash flow statement Parent company accounts Material accounting policies Segmental reporting Net interest income Net fee and commission income Net trading income Net investment income Operating expenses Credit impairment charges Tax Earnings per share Dividends on ordinary shares Assets and liabilities held at fair value Trading portfolio Financial assets at fair value through the income statement Derivative financial instruments Financial assets at fair value through other comprehensive income Financial liabilities designated at fair value Fair value of financial instruments Offsetting financial assets and financial liabilities Page Note 396 413 414 415 416 417 418 421 425 427 428 430 430 431 431 434 439 439 440 440 441 448 448 449 459 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Assets at amortised cost and other investments Accruals, provisions, contingent liabilities and legal proceedings Property, plant and equipment Leases Goodwill and intangible assets Other liabilities Provisions Capital instruments, equity and reserves Employee benefits Scope of consolidation Contingent liabilities and commitments Legal, competition and regulatory matters Subordinated liabilities Ordinary shares, share premium and other equity Reserves Non-controlling interests Staff costs Share-based payments Pensions and post-retirement benefits Principal subsidiaries Structured entities Investments in associates and joint ventures Securitisations Assets pledged, collateral received and assets transferred Other disclosure matters Related party transactions and Directors’ remuneration Auditor’s remuneration Assets and liabilities included in disposal group classified as held for sale Subsequent events Barclays PLC (the Parent company) Related undertakings Page Note 460 461 464 468 468 469 470 475 477 478 479 480 481 483 489 491 495 495 497 499 501 502 502 503 504 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 396 KPMG LLP’s independent auditor’s report to the members of Barclays PLC 1. Our opinion is unmodified Basis for opinion In our opinion: • the financial statements of Barclays PLC give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at 31 December 2023, and of the Group’s and the Parent Company’s profit for the year then ended; • the Group financial statements have been properly prepared in accordance with UK-adopted international accounting standards; • the Parent Company financial statements have been properly prepared in accordance with UK- adopted international accounting standards as applied in accordance with the provisions of the Companies Act 2006; • the Group and Parent Company financial statements have been prepared in accordance with the requirements of the Companies Act 2006. What our opinion covers We have audited the Group and Parent Company financial statements of Barclays PLC for the year ended 31 December 2023 (FY23) included in the Annual Report and Accounts, which comprise: Group (Barclays PLC and its subsidiaries) • Consolidated income statement • Consolidated statement of comprehensive income • Consolidated balance sheet • Consolidated statement of changes in equity • Consolidated cash flow statement • Notes 1 to 43 of the Consolidated Financial Statements, including the summary of material accounting policies Parent Company (Barclays PLC) • Statement of comprehensive income • Balance sheet • Statement of changes in equity • Cash flow statement • Note 42 to the Consolidated Financial Statements, including the summary of material accounting policies We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities are described below. We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion. Our audit opinion and matters included in this report are consistent with those discussed and included in our reporting to the Board Audit Committee (“BAC”). We have fulfilled our ethical responsibilities under, and we remain independent of the Group in accordance with, UK ethical requirements including the FRC Ethical Standard as applied to listed public interest entities. 2. Overview of our audit Factors driving our view of risks Following our FY22 audit and considering developments affecting the Barclays PLC Group since then, we have updated our risk assessment. The macro-economic environment continues to drive our risk assessment as general economic uncertainty has led to sustained affordability pressures associated with rising inflation and interest rates. This economic uncertainty and change has brought both pressures and opportunities. The higher interest rate environment has provided an uplift to net interest income, and has driven increased competition for deposits. Lower market volatility and reduced client activity have created a challenging environment within the Corporate and Investment Bank, resulting in lower income for FY23. As part of our risk assessment, we have maintained our focus on future economic assumptions used by the Group in its key estimates both at the year end and, where relevant, on a forward-looking basis. Our risk assessment also considered instances of non-compliance with laws and regulations (including open enforcement actions against the Group) and specifically those that could reasonably be expected to have a material effect on the financial statements. We considered management’s assessment of how these occurred and their assessment of whether the risk could be more pervasive. Key Audit Matters Item Impairment allowance on loans and advances at amortised cost, including off- balance sheet elements of the allowance & 4.1 Valuation of financial instruments held at fair value 1 4.2 Valuation of gross defined benefit pension obligation in respect of the UK retirement fund ('UKRF') User access management Recoverability of Parent Company’s investment in subsidiaries 1 4.3 1 4.4 1 4.5 Similar risk to FY22 Increased risk since FY22 1 & Our use of specialists and innovation Using the work of specialists and specific team members with expertise in a specialised area of accounting or auditing: We used our specialists and specific team members with expertise in a specialised area of accounting or auditing to assist us in various aspects of our audit. This included, for example: • Credit risk modellers for our testing of the ECL models • Economics specialists for our work related to the macro-economic variables and scenarios used in the determination of the ECL provisions • Valuation specialists for our independent repricing of samples of financial instruments • Corporate finance valuation specialists for our work over the methodology underpinning, and certain of the assumptions used in, the impairment assessment of goodwill and intangibles and the carrying value of subsidiaries • Actuarial pensions specialists for our work on the valuation of the defined benefit obligation • Tax specialists for our work over the tax charge, the effective tax rate and uncertain tax positions • IT auditors for our testing of automated and general IT controls Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 397 KPMG LLP’s independent auditor’s report to the members of Barclays PLC (continued) Incorporating unpredictability into our audit: A requirement of the auditing standards is that we undertake procedures which are deliberately unexpected and could not have reasonably been predicted by Barclays’ management. As an example, we update our criteria for selecting journals with a higher risk of management override each year so that the selection criteria do not become predictable. Outside of journals, for a selection of fair value financial instruments, we performed intra- month independent re-pricing to incorporate an element of unpredictability in our audit procedures. Innovation in the audit: Our audit is committed to driving innovation and the increased use of technology. In 2023 we have continued to deploy a large number of data and analytics tools across our audit. We have also continued to innovate our audit of valuation of financial instruments, by using the Digital Media Analytics tool to gather market news and data for key principal investments and leveraged finance exposures for consideration as part of our risk assessment procedures. Board Audit Committee (“BAC”) interaction During the year, the BAC met 11 times. KPMG are invited to attend all BAC meetings and are provided an opportunity to meet with the BAC in private sessions without the Executive Directors being present. For each Key Audit Matter, we have set out communications with the BAC in section 4, including matters that required particular judgement for each. In addition, our audit team includes a senior partner who has specific responsibility for ensuring audit quality (our “Audit Quality Partner”). The Board Audit Committee met with the Audit Quality Partner twice in the year to receive a report on his assessment of audit quality. The Board Audit Committee also met with KPMG’s Head of Audit Quality who provided an update on the initiatives KPMG is taking to sustain high levels of audit quality. The matters included in the BAC Chair’s report on page 166 are materially consistent with our observations of those meetings. In addition, KPMG are invited to attend the Board Risk Committee meetings. Our independence We have fulfilled our ethical responsibilities under, and we remain independent of the Group in accordance with, UK ethical requirements including the FRC Ethical Standard as applied to listed public interest entities. Apart from the matters noted below, we have not performed any non-audit services during the year ended 31 December 2023 or subsequently which are prohibited by the FRC Ethical Standard. We have identified that a KPMG member firm has provided preparation of local financial statements services over the period 2018 to 2023. That member firm had no involvement in the group audit of Barclays PLC. The services, which have been terminated, were administrative in nature and did not involve any management decision-making or bookkeeping. The work was undertaken after the group audit opinion was signed by KPMG LLP for each of the related financial years and had no direct or indirect effect on Barclays PLC’s consolidated financial statements. In our professional judgment, we confirm that based on our assessment of the breach, our integrity and objectivity as auditor has not been compromised and we believe that an objective, reasonable and informed third party would conclude that the provision of these services would not impair our integrity or objectivity for any of the impacted financial years. The Board Audit Committee concurred with this view. We were first appointed as auditor by the shareholders for the year ended 31 December 2017. The period of total uninterrupted engagement is for the seven financial years ended 31 December 2023. The Group lead engagement partner is required to rotate after five years. This is the second set of UK Financial Statements that Stuart Crisp has signed and he will be required to rotate after the FY26 audit. The average tenure of key audit partners who are responsible for component audits, as set out in section 7 below, is two years, with the shortest being their first year of involvement and longest being five years. Total audit fee Other audit related fees Other services Date first appointed Uninterrupted audit tenure Next financial period which requires a tender Tenure of Group lead engagement partner Average tenure of key audit partners £64m £12m £2m 31 March 2017 7 years 31 December 2027 2 years 2 years Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 398 KPMG LLP’s independent auditor’s report to the members of Barclays PLC (continued) Materiality (Item 6 below) Group scope (Item 7 below) Coverage of Group financial statements Group total income* The scope of our work is influenced by our view of materiality and our assessed risk of material misstatement. We have determined overall materiality for the Barclays PLC Group to be £350m (FY22: £275m). We determined that profit before tax (PBT) remains the key benchmark for the Barclays PLC Group. For FY23, we adjusted PBT for items which do not represent the normal, continuing operations of the Group. As such, for FY23 we based our materiality on normalised profit before tax of £7,484m, of which it represents 4.7% (FY22: 3.9%). Materiality for the parent company financial statements as a whole was set at £170m (2022: £100m), which is the component materiality for the parent company determined by the group audit engagement team. This is lower than the materiality we would otherwise have determined with reference to a benchmark of net assets of which it represents 0.3% (FY22: 0.2%). Normalised profit before tax £7,484m (2022 PBT: £7,012m) n Normalised profit before tax £7,484m n Group materiality £350m We have performed risk assessment and planning procedures to determine which of the Group’s components are likely to include risks of material misstatement to the Group financial statements, the type of procedures to be performed at these components and the extent of involvement required from component auditors around the world for the purpose of our opinion on the consolidated financial statements. We have also considered the extent to which the Group has established central hubs in shared service centre structures in India. The outputs from these hubs are included in the financial information of the reporting components and so the India operations are not considered to be a separate component. We have performed certain audit procedures centrally across the Group, set out in more detail in Section 7. In addition, we have performed Group level analysis on the remaining components to determine whether further risks of material misstatement exist in those components. We consider the scope of our audit, as communicated to the Board Audit Committee, to be an appropriate basis for our audit opinion. The components within the scope of our work accounted for the following percentages: n 2023 Full scope audit n 2023 Audit of account balances n 2023 Specific audit procedures n 2023 Other risk assessment procedures n 2022 Full scope audit n 2022 Audit of account balances n 2022 Other risk assessment procedures Group total assets* n 2023 Full scope audit n 2023 Audit of account balances n 2023 Specific audit procedures n 2023 Other risk assessment procedures n 2022 Full scope audit n 2022 Audit of account balances n 2022 Other risk assessment procedures (2022: 95 %) (2022: 97%) Note * Percentage of Group total income and assets over which we performed full scope audit or audit of account balances A £350m Whole financial statements materiality (2022: £275m) B £227m Performance materiality (2022: £179m) £17m Misstatements reported to the Board Audit Committee (2022: £13m) C 96%98% Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 399 KPMG LLP’s independent auditor’s report to the members of Barclays PLC (continued) The impact of climate change on our audit In planning our audit, we have considered the potential impact of risks arising from climate change on the Group’s business and its financial statements. The Group has set out its ambition under the Paris Accord to be a net zero bank by 2050. Further information is provided in the Group’s Climate and Sustainability report, which has been incorporated into the 2023 Annual Report on pages 59 -129. Climate change risks, opportunities and the Group’s own commitments and changing regulations could have a significant impact on the Group’s business and operations. There is the possibility that climate change risks, both physical and transitional, could affect financial statement balances, through estimates such as credit risk and market risk. There is enhanced narrative in the Annual Report on climate matters. As part of our audit we performed a risk assessment of the impact of climate change risk and the commitments made by the Group in respect of climate change on the financial statements and our audit approach. As a part of this we held discussions with our own climate change professionals to challenge our risk assessment. In doing this we performed the following: • Understanding management’s processes: we made enquiries to understand management’s assessment of the potential impact of climate change risk on the Group’s Annual Report and Accounts and the Group’s preparedness for this. As a part of this we made enquiries to understand management’s risk assessment process as it relates to possible effects of climate change on the Annual Report and Accounts including the way in which the accounting policies of the Group (including those relating to products with specific climate features) are updated to reflect climate change risks. We also read and discussed with management the quantitative analysis prepared by the Group to support its assessment of the impact of climate risk on credit risk. • Retail credit risk: we assessed how the Group considers the impact of physical risks on the valuation of mortgage collateral. Specifically, we performed data and analytic driven risk assessment procedures to understand the potential impact of flooding and subsidence on the valuation of mortgage collateral and made enquiries of management to understand how this is considered within their own collateral valuation process. • Corporate credit risk: we assessed how the Group considers the impact of climate risk on corporate counterparties through our individual loan assessments where, for performing counterparties, we assessed how climate change risk impacts certain counterparties within the commercial bank, including the impact on their credit rating as applicable. The focus of our procedures was on certain counterparties who operate in industries with greater exposure to climate risk - the energy, transportation, materials and buildings, agriculture, food and forest product sectors. • Market risk: as part of our risk assessment, we incorporated a consideration of the climate change impact on unobservable inputs used in the valuation of certain financial instruments in elevated risk sectors including energy, metals and mining. • Annual report narrative: we made enquiries of management to understand the process by which climate related narrative is developed including the primary sources of data used and the governance process in place over the narrative. As a part of our risk assessment, we read the climate related information in the front half of the Annual Report and considered consistency with the financial statements and our audit knowledge. On the basis of the procedures performed above, we concluded that, while climate change posed a risk to the determination of asset values in the current year, the risk was not significant when we considered the nature of the assets and the relevant contractual terms. As a result, there was no material impact from climate change on our key audit matters. 3. Going concern, viability and principal risks and uncertainties The Directors have prepared the financial statements on the going concern basis as they do not intend to liquidate the Group or the Parent Company or to cease their operations, and they have concluded that the Group’s and the Parent Company’s financial position means that this is realistic. They have also concluded that there are no material uncertainties that could have cast significant doubt over their ability to continue as a going concern for at least a year from the date of approval of the financial statements (“the going concern period”). Going concern We used our knowledge of the Group and Parent Company, the financial services industry, and the general economic environment to identify the inherent risks to the business model and analysed how those risks might affect the Group’s and Parent Company’s financial resources or ability to continue operations over the going concern period. The risks that we considered most likely to adversely affect the Group’s and Parent Company’s available financial resources over this period were: • the availability of funding and liquidity in the event of a market wide stress scenario; and • the impact on regulatory capital requirements in the event of an economic slowdown. We considered whether these risks could plausibly affect the availability of financial resources in the going concern period by comparing severe, but plausible downside scenarios that could arise from these risks individually and collectively against the level of available financial resources indicated by the Group’s financial forecasts. Our procedures also included an assessment of whether the going concern disclosure in note 1 to the financial statements gives a complete and accurate description of the Directors’ assessment of going concern. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 400 KPMG LLP’s independent auditor’s report to the members of Barclays PLC (continued) We are also required to review the Viability Statement set out on page 54 under the Listing Rules. Our work is limited to assessing these matters in the context of only the knowledge acquired during our financial statements audit. As we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgements that were reasonable at the time they were made, the absence of anything to report on these statements is not a guarantee as to the Group’s and Parent Company’s longer-term viability. Our reporting • We have nothing material to add or draw attention to in relation to these disclosures. • We have concluded that these disclosures are materially consistent with the financial statements and our audit knowledge. Accordingly, based on those procedures, we found the directors’ use of the going concern basis of preparation without any material uncertainty for the Group and Parent Company to be acceptable. However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgements that were reasonable at the time they were made, the above conclusions are not a guarantee that the Group or the Parent Company will continue in operation. Our conclusions • We consider that the directors’ use of the going concern basis of accounting in the preparation of the Group’s and Parent Company’s financial statements is appropriate; • We have not identified, and concur with the directors’ assessment that there is not, a material uncertainty related to events or conditions that, individually or collectively, may cast significant doubt on the Group’s or Parent Company's ability to continue as a going concern for the going concern period; • We have nothing material to add or draw attention to in relation to the directors’ statement in Note 1 to the financial statements on the use of the going concern basis of accounting with no material uncertainties that may cast significant doubt over the Group and Parent Company’s use of that basis for the going concern period, and we found the going concern disclosure in note 1 to be acceptable; and • The related statement under the Listing Rules set out on page 54 is materially consistent with the financial statements and our audit knowledge. Disclosures of emerging and principal risks and longer-term viability Our responsibility We are required to perform procedures to identify whether there is a material inconsistency between the directors’ disclosures in respect of emerging and principal risks and the viability statement, and the financial statements and our audit knowledge. Based on those procedures, we have nothing further to add or draw attention to in relation to: • the directors’ confirmation within the viability statement that they have carried out a robust assessment of the emerging and principal risks facing the Group, including those that would threaten its business model, future performance, solvency and liquidity; • the Principal Risks and Uncertainties disclosures describing these risks and how emerging risks are identified and explaining how they are being managed and mitigated; and • the directors’ explanation in the viability statement of how they have assessed the prospects of the Group, over what period they have done so and why they considered that period to be appropriate, and their statement as to whether they have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the period of their assessment, including any related disclosures drawing attention to any necessary qualifications or assumptions. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 401 KPMG LLP’s independent auditor’s report to the members of Barclays PLC (continued) 4. Key audit matters What we mean Key Audit Matters are those matters that, in our professional judgement, were of most significance in the audit of the financial statements and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us, including those which had the greatest effect on: • the overall audit strategy; • the allocation of resources in the audit; and • directing the efforts of the engagement team. We include below the Key Audit Matters in decreasing order of audit significance together with our key audit procedures to address those matters and our results from those procedures. These matters were addressed, and our results are based on procedures undertaken for the purpose of our audit of the financial statements as a whole. We do not provide a separate opinion on these matters. 4.1 Impairment allowances on loans and advances at amortised cost, including off-balance sheet elements of the allowance Financial Statement Elements FY23 FY22 Our assessment of risk vs FY22 Impairment allowances on loans and advances at amortised cost, including off-balance sheet elements of the allowance (see page 292) £6.3bn £6.2bn & Our assessment is that the risk has increased since FY22. There is increased uncertainty arising from higher interest rates and continued inflationary pressures. Our results FY23: Acceptable FY22: Acceptable Description of the Key Audit Matter Subjective estimate The estimation of expected credit losses (“ECL”) on financial instruments involves significant judgement and estimates. The key areas where we identified greater levels of management judgement and therefore increased levels of audit focus in the Group’s estimation of ECL are: • Model estimations – Inherently judgemental modelling and assumptions are used to estimate ECL which involves determining Probability of Default (“PD”), Loss Given Default (“LGD”), and Exposure at Default (“EAD”). ECL may be inappropriate if certain models or underlying assumptions do not accurately predict defaults or recoveries over time, become out of line with wider industry experience, or fail to reflect the credit risk of financial assets. As a result, certain IFRS 9 models and model assumptions are the key drivers of complexity and uncertainty in the Group’s calculation of the ECL estimate. • Economic scenarios – IFRS 9 requires the Group to measure ECL on an unbiased forward-looking basis reflecting a range of future economic conditions. Significant management judgement is applied in determining the forward-looking economic scenarios used as an input to calculate ECL, the associated scenario probability weightings, and the key economic variables that drive the scenarios. There is also a high level of complexity of models used to derive the probability weightings. Our response to the risk Our procedures to address the risk included: Risk assessment: We performed granular and detailed risk assessment procedures over the entirety of the loan and advances at amortised cost including off-balance sheet elements of the allowance within the Group’s financial statements. As part of these risk assessment procedures, we identified the portfolios associated with a risk of material misstatement including those arising from significant judgements over the estimation of ECL either due to inputs, methods or assumptions. Controls testing: We performed end to end process walkthroughs to identify the key systems, applications and controls used in the ECL processes. We tested the relevant manual, general IT and application controls over key systems used in the ECL process. Key aspects of our controls testing involved evaluating the design and implementation and testing the operating effectiveness of the key controls over the: • completeness and accuracy of the key inputs into the IFRS 9 impairment models; • application of the staging criteria; • model validation, implementation and monitoring; • completeness, authorisation and calculation of post model adjustments and management overlays; • selection and implementation of economic variables and the controls over the economic scenario selection and probabilities; and • credit reviews that determine customer risk ratings for a population of wholesale customers, including a risk-based selection. Our credit risk modelling expertise: We involved our own credit risk modellers who assisted in the following: • evaluating the Group’s impairment methodologies for compliance with IFRS 9; • inspecting model code for the calculation of certain components of the ECL model to assess its consistency with the Group’s model methodology; • evaluating whether model changes (including updated model code), for a selection of models which were changed or updated during the year, were appropriate by assessing the updated model methodology against the applicable accounting standard; reperforming the calculation of certain adjustments to assess consistency with the qualitative adjustment methodologies; • • assessing and reperforming, for a selection of models, the reasonableness of the model predictions by comparing them against actual results and evaluating the resulting differences; • evaluating the model output for a selection of models by inspecting the corresponding model functionality and independently implementing the model by rebuilding the model code and comparing our independent output with management’s output; and independently recalculating a selection of model assumptions using more recent data for certain portfolios. This is used to develop a range for ECL which is compared to management’s point estimate. • Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 402 KPMG LLP’s independent auditor’s report to the members of Barclays PLC (continued) Description of the Key Audit Matter ▪ Qualitative adjustments – Adjustments to the model-driven ECL results are raised by management to address known impairment model limitations, emerging trends, or risks not captured by models. They represent approximately 6.1% of the ECL. These adjustments are inherently uncertain and significant management judgement is involved in identifying and estimating certain post model adjustments (“PMA’s”) and management overlays. The effect of these matters is that, as part of our risk assessment, we determined that the impairment of loans and advances to customers including off-balance sheet elements of the allowance has a high degree of estimation uncertainty, with a potential range of reasonable outcomes greater than our materiality for the financial statements as a whole, and possibly many times that amount. The credit risk sections of the financial statements (pages 291-335) disclose the sensitivities estimated by the Group. Disclosure quality The disclosures regarding the Group’s application of IFRS 9 are key to explaining the key judgements and material inputs to the IFRS 9 ECL results. Communications with the Barclays PLC Board Audit Committee Our discussions with and reporting to the Board Audit Committee included: • The effectiveness of the control environment operating over the calculation of the ECL provisions; • The determination and utilisation of judgemental post model adjustments recognised; • Model monitoring results and adjustments made; • Management’s economic forecast and associated scenario probability weights; and • The disclosures made to explain ECL, including explaining the resulting estimation uncertainty. Our response to the risk Our economics expertise: We involved our own economic specialists who assisted us in: • assessing the reasonableness of the Group’s methodology and models for determining the economic scenarios used and the probability weightings applied to them; • assessing key economic variables which included comparing samples of economic variables to external sources; • assessing the overall reasonableness of the economic forecasts by comparing the Group’s forecasts to our own modelled forecasts; and • assessing the reasonableness of the Group’s qualitative adjustments by challenging key economic assumptions applied in their calculation based on external sources. Other test of details: Key aspects of our testing in addition to those set out above involved: • sample testing over key inputs into the ECL calculations; • selecting a sample of post model adjustments, considering the size and complexity of management overlays, to assess the reasonableness of the adjustments by challenging key assumptions, inspecting the calculation methodology and tracing a sample of the data used back to source data; • assessing the completeness of post model adjustments identified based on our knowledge gained from other risk-assessment and substantive audit procedures; and • selecting a sample of credit reviews to assess the reasonableness of customer risk ratings by challenging key judgements and considering disconfirming or contradictory evidence. Assessing transparency: We assessed whether the disclosures appropriately disclose and address the uncertainty which exists when determining the ECL. In addition, we assessed whether the disclosure of the key judgements and assumptions was sufficiently clear. Further information in the Annual Report and Accounts: See the Board Audit Committee Report on page 166 for details on how the Board Audit Committee considered impairment as an area of focus, page 431 for the accounting policy on accounting for the impairment of financial assets under IFRS 9, pages 291-335 for the credit risk disclosures, and page 431 for the financial disclosure note 8; Credit Impairment charges. Areas of particular auditor judgement We identified the following as the areas of particular auditor judgement: • The appropriateness of the model estimations and qualitative adjustments recorded to the model driven ECL calculations to reflect the current economic environment. Our results Based on the risk identified and our procedures performed we considered the impairment allowances on loans and advances at amortised cost, including off- balance sheet elements and the related disclosures to be acceptable (2022 result: acceptable). Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 403 KPMG LLP’s independent auditor’s report to the members of Barclays PLC (continued) 4.2 Valuation of financial instruments held at fair value Financial Statement Elements FY23 FY22 Level 2 assets at fair value* (note 17) Level 2 liabilities at fair value* (note 17) Level 3 assets at fair value (note 17) Level 3 liabilities at fair value (note 17) £560bn £571bn £19bn £6.2bn £595bn £572bn £21bn £7.5bn Our assessment of risk vs FY22 1 Our assessment is that the risk is similar to FY22. Our results FY23: Acceptable FY22: Acceptable * In addition to Level 3 portfolios, the key audit matter identified relates to one Level 2 derivatives portfolio within these balances, and certain X VA adjustments made to derivative valuations, both of which we considered to be harder-to-value. Our response to the risk Our procedures to address the risk included: Risk assessment: We performed granular and detailed risk assessment procedures throughout the audit period over the entirety of the balances within the Group’s financial statements (i.e. all of the fair value financial instruments held by the Group). As part of these risk assessment procedures, we identified which portfolios and the associated valuation inputs have a risk of material misstatement including those arising from significant judgements over valuation either due to unobservable inputs or complex models. Control testing: We attended management’s Valuation Committee throughout the year and observed discussion and challenge over valuation themes including items related to the valuation of certain harder-to-value financial instruments recorded at fair value. We performed end to end process walkthroughs to identify the key systems, applications and controls used in the valuations processes. We tested the design and operating effectiveness of key controls relating specifically to these portfolios. Key aspects of our controls testing involved evaluating the design and implementation and testing the operating effectiveness of the key controls over: • independent price verification (IPV), performed by a control function, of key market pricing inputs, including completeness of positions and valuation inputs subject to the IPV control; • FVAs, including exit adjustments (to mark the portfolio to bid or offer prices), model shortcoming reserves to address model limitations and XVAs; and • the validation, completeness, implementation and usage of valuation models. This included controls over assessment of model limitations and assumptions. Our valuations expertise: We involved our own valuation professionals with specialised skills and knowledge, who assisted in the following: • independently re-pricing a selection of fair value financial instruments and challenging management on the valuations where they were outside our tolerance; and • challenging the appropriateness of significant models and methodologies used in calculating fair values, risk exposures and in calculating FVAs and XVAs, including comparison to industry practice. Seeking contradictory evidence: For a selection of collateral disputes identified through management’s control where significant fair value differences were observable with the market participant on the other side of the trade, we challenged management’s valuation by inspecting evidence of the investigation and resolution of the disputes. We also utilised collateral dispute data to identify fair value financial instruments with significant fair value differences against market counterparties and selected these to independently reprice. Inspection of movements: We inspected trading revenue arising on level 3 positions to assess whether material day one gains or losses generated were in line with the accounting standards. Historical comparison: We performed a retrospective review by inspecting significant gains and losses on a selection of new fair value financial instruments, position exits and restructurings throughout the audit period and evaluated whether these data points indicated elements of fair value not incorporated in the current valuation methodologies. We also inspected movements in unobservable inputs throughout the period to challenge whether any gain or loss generated was appropriate. Assessing transparency: For the Level 3 portfolios, we assessed the adequacy of the Group’s financial statements disclosures in the context of the relevant accounting standards. Description of the Key Audit Matter Subjective valuation The fair value of the Group’s financial instruments is determined through the application of valuation techniques which can involve the exercise of significant judgement by the Group in relation to the choice of the valuation models, pricing inputs and post- model pricing adjustments, including fair value adjustments (FVAs) and credit, collateral and funding adjustments (together referred to as XVAs). Where significant pricing inputs are unobservable, management has limited reliable, relevant market data available in determining the fair value and hence estimation uncertainty can be high. These financial instruments are classified as Level 3, with management having controls in place over the boundary between Level 2 and 3 positions. Our significant audit risk for the Level 3 portfolios is therefore primarily due to these unobservable inputs. In addition, for the Level 2 portfolios, there may also be valuation complexity, specifically where valuation modelling techniques result in significant limitations or where there is greater uncertainty around the choice of an appropriate pricing methodology, and consequently more than one valuation methodology could be used for that product across the market. We identified two areas of such complexity. The first a derivatives portfolio that we considered to be harder to value Level 2 due to an element of modelling complexity associated with the product, and the second the XVA adjustments made to uncollateralised and partially collateralised derivative valuations. The effect of these matters is that, as part of our risk assessment, we determined that the subjective estimates in fair value measurement of Level 3 and harder-to-value Level 2 portfolios have a high degree of estimation uncertainty, with a potential range of reasonable outcomes greater than our materiality for the financial statements as a whole, and possibly many times that amount. The financial statements (note 17) disclose the sensitivity in Level 3 portfolios estimated by the Group. Disclosure quality For the Level 3 portfolios, the disclosures are key to explaining the valuation techniques, key judgements, assumptions and material inputs. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 404 KPMG LLP’s independent auditor’s report to the members of Barclays PLC (continued) Communications with the Barclays PLC Board Audit Committee Our discussions with and reporting to the Board Audit Committee included: • Our approach to the audit of the fair value of Level 3 and harder-to-value Level 2 financial instrument assets and liabilities. This included details of our risk assessment, controls and substantive procedures. • Our conclusions on the appropriateness of the Group’s fair value methodology, models, pricing inputs and fair value adjustments. Areas of particular auditor judgement We identified the following as the areas of particular auditor judgement: • The appropriateness of the valuation of Level 3 and harder-to-value level 2 financial instruments, and particularly the selection of market data inputs and valuation models. Our results Based on the risk identified and our procedures performed we consider the fair value of Level 3 and harder-to-value Level 2 financial instrument assets and liabilities recognised and the related disclosures to be acceptable (2022 result: acceptable). Further information in the Annual Report and Accounts: See the Board Audit Committee Report on page 166 for details on how the Board Audit Committee considered Valuations as an area of focus, page 449 for the accounting policy on financial assets and liabilities, and page 449 for the financial disclosure note 17; Fair value of financial instruments. 4.3 Valuation of the gross defined benefit pension obligation in respect of the UK Retirement Fund (‘UKRF’) Financial Statement Elements Gross defined benefit obligation related to UKRF (note 32) FY23 FY22 £20.6bn £20.0bn Our assessment of risk vs FY22 1 Our assessment is that the risk is similar to FY22. Our results FY23: Acceptable FY22: Acceptable Description of the Key Audit Matter Subjective valuation The valuation of the defined benefit obligation in respect of the UKRF is dependent on key actuarial assumptions, including the discount rates, retail price index (‘RPI’) and mortality assumptions. Small changes to these assumptions may still have a significant impact on the measurement of the defined benefit pension obligation. As part of our risk assessment, we determined that the defined benefit pension obligation has a high degree of estimation uncertainty, with a potential range of reasonable outcomes greater than our materiality for the financial statements, and possibly many times that amount. Disclosure quality The disclosures regarding the Group’s application of IAS 19 (including risks, assumptions and sources of estimation uncertainty) are key to explaining the key judgements applied in the IAS 19 Defined Benefit Obligation calculation. Communications with the Barclays PLC Board Audit Committee Our discussions with and reporting to the Board Audit Committee included: • Our definition of the Key Audit Matter relating to the valuation of the defined benefit pension obligation including the rationale for not including the valuation of pension assets in the key audit matter. • We also discussed our audit response to the key audit matter which included the use of specialists to challenge key aspects of management’s actuarial valuation. Our response to the risk Our procedures to address the risk included: Control testing: We performed end to end process walkthroughs to identify the key systems, applications and controls used in the defined benefit obligation process. We tested the design and operating effectiveness of key controls relating to the process. These included: • controls over management’s review of IAS19 assumptions including the discount rate, RPI and mortality assumptions; and reconciliation controls of the IAS19 disclosures to underlying data. • Evaluation of management’s expert: : We evaluated the objectivity and competence of management’s actuarial expert involved in the valuation of the defined benefit pension obligation. Our actuarial expertise: We involved our own actuarial professionals in the following: • evaluating the judgements made and the appropriateness of methodologies used by management and management’s actuarial expert in determining the key actuarial assumptions; and • comparing the assumptions used by Barclays PLC to our independently compiled expected ranges based on market observable indices and our market experience. Assessing transparency: We assessed the adequacy of the Group’s financial statements disclosures in the context of the relevant accounting standards. Areas of particular auditor judgement Our results We identified the following as areas of particular auditor judgement: • Subjective and complex auditor judgement was required in evaluating the key actuarial assumptions used by the Group (including the discount rate, retail price index and mortality assumptions). Based on the risk identified and our procedures performed we consider the valuation of the defined benefit pension obligation in respect of UKRF and the related disclosures to be acceptable (2022 result: acceptable). Further information in the Annual Report and Accounts: See page 483 for the accounting policy on defined benefit schemes, and page 483 for the financial disclosure note 32; Pensions and post- retirement benefits. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 405 KPMG LLP’s independent auditor’s report to the members of Barclays PLC (continued) 4.4 User access management Financial Statement Elements Our assessment of risk vs FY22 User access management has a potential impact throughout the financial statements. 1 Our assessment is the risk is similar to FY22 Our results FY23 and FY22: Our testing did not identify unauthorised user activities in the systems relevant to financial reporting which would have required us to significantly expand the extent of our planned detailed testing. Description of the Key Audit Matter Control Performance Operations across several countries support a wide range of products and services resulting in a large and complex IT infrastructure relevant to the financial reporting processes and related internal controls. Our response to the risk Our procedures to address the risk included: Control testing: We tested the design, implementation and operating effectiveness of automated controls that support material balances in the financial statements. We also tested the design and operating effectiveness of the relevant preventative and detective general IT controls over user access management including: User access management controls are an integral part of the IT environment to ensure both system access and changes made to systems and data are authorised and appropriate. Our audit approach relies on the effectiveness of IT access management controls. Our audit procedures identified deficiencies in certain IT access controls for systems relevant to financial reporting. More specifically, previously identified control deficiencies remain open around monitoring of activities performed by privileged users on infrastructure components. Management has an ongoing programme to remediate the deficiencies. Since these deficiencies were open during the year, we performed additional procedures to respond to the risk of unauthorised changes to automated controls over financial reporting, such as an assessment of compensating controls implemented by management. Communications with the Barclays PLC Board Audit Committee Our discussions with and reporting to the Board Audit Committee included: • Our response to the Key Audit Matter. • authorising access rights for new joiners; • • timely removal of user access rights; logging and monitoring of user activities; • privileged user access management and monitoring; • developer access to transaction and balance information; • segregation of duties; • • re-certification of user access rights; and restricting access to make changes to systems and data. We performed procedures to assess whether additional detective compensating controls operate at the required level of precision to support our assessed risk of unauthorised activities and we tested management’s detective controls. Areas of particular auditor judgement We identified the following as the areas of particular auditor judgement: • The Key Audit Matter relates to determining whether user access management controls were designed and implemented and operated effectively. Limited auditor judgement was required relative to the other Key Audit Matters which have been identified. Our results Based on the risk identified and our procedures performed, we did not identify unauthorised user activities in the systems relevant to financial reporting which would have required us to significantly expand the extent of our planned detailed testing. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 406 KPMG LLP’s independent auditor’s report to the members of Barclays PLC (continued) 4.5 Recoverability of parent company’s investment in subsidiaries Financial Statement Elements Investment in subsidiaries (Parent company accounts and note 42) FY23 FY22 £64.5bn £64.5bn Our assessment of risk vs FY22 1 Our assessment is the risk is similar to FY22. Our results FY23: Acceptable FY22: Acceptable Description of the Key Audit Matter Subjective assessment The Parent Company’s investment in subsidiaries may be misstated if the carrying value of the investment in the balance sheet is not supported by the recoverable amount of the investment. Barclays has estimated the recoverable amount using the future cash flows of the underlying business (the value in use (“VIU”)). The calculation of VIU is dependent on certain key assumptions around the future cash flows which have been forecasted using the Group’s Medium-Term Plan (‘MTP’), the discount rates and the terminal growth rates. These assumptions, which are judgemental, are derived from a combination of management estimates, market data and other information obtained from external sources. These assumptions continued to be impacted by uncertainty in the wider economic environment. This has contributed to the complexity and subjectivity in the impairment assessment process, in addition to the complexities of the valuation of a Bank. Due to the materiality of the investment in subsidiaries in the context of the Parent Company financial statements, this is the area that had the greatest impact on the overall Parent Company audit. Our response to the risk Our procedures to address the risk included: Control testing: We performed end to end process walkthroughs to identify the key systems, applications and controls used in the process to assess the carrying value of the Parent Company’s investment in subsidiaries. We tested the design and operating effectiveness of the key controls relating to the process. These included controls over the identification of indicators of impairment and review of the key assumptions in determining the value in use. Test of details: We compared the carrying amount of each subsidiary to its draft balance sheet to identify whether its net assets, being an approximation of their minimum recoverable amount, were in excess of its carrying amount. We assessed for potential indicators that investments in subsidiaries might be impaired. Benchmarking assumptions: For the two largest subsidiaries (Barclays Bank PLC and Barclays Bank UK PLC) we compared key assumptions in the associated VIU calculations including those underlying certain estimated future cash flows, the discount rate and the terminal growth rate to externally derived data including analyst broker reports, peer bank data and projected economic growth. Our valuations expertise: We involved our own valuations specialists to assist us in the following: • evaluating the appropriateness of the discount rate used by independently developing discount rate ranges using external data sources and peer bank data; and • assessing whether the methodology over management’s calculation of the VIU is compliant with the requirements of the accounting standard. Our business understanding: We used our business understanding to evaluate the reasonableness of certain key assumptions and considerations made when developing the Group’s MTP estimated future cash flows. Historical comparison: We performed a retrospective review by comparing the MTP from previous years to actual results to assess the Group’s ability to accurately prepare cash flow forecasts at the individual subsidiary level. Assessing transparency We assessed whether the disclosures around the assessment of recoverability of the Parent Company’s investment in subsidiaries adequately reflects key assumptions and sensitivities considering the level of risks inherent in the assessment of recoverable amount of the Parent Company’s investment in subsidiaries. Communications with the Barclays Board Audit Committee Our discussions with and reporting to the Board Audit Committee included: • Our audit response to the Key Audit Matter which included the use of specialists to challenge key aspects of management’s impairment assessment and the range of reasonably possible alternatives for significant assumptions. Areas of particular auditor judgement We identified the following as the areas of particular judgement: • We identified the reasonableness of the assumptions underlying the estimated future cash flows and appropriateness of the discount rate, which was used in the impairment assessment, as the areas of particular judgement. Our results Based on our procedures performed, we consider the Parent Company’s investment in subsidiaries balance to be acceptable (2022 result: acceptable). Further information in the Annual Report and Accounts: See page 503 for the accounting policy on the recoverability of the investment in subsidiaries and page 503 for the financial disclosure note 42; Barclays PLC (the Parent Company). Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 407 KPMG LLP’s independent auditor’s report to the members of Barclays PLC (continued) 5. Our ability to detect irregularities, and our response Fraud - identifying and responding to risks of material misstatement due to fraud Fraud risk assessment To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud. In this risk assessment we considered the following: • Our meetings throughout the year with the Group Head of Risk, Group Head of Compliance and Group Head of Legal and inspection of Barclays’ internal ethics and compliance reporting summaries, including those concerning investigations and regulatory correspondence; • Enquiries of operational managers, internal audit, and the Board Audit Committee and inspection of policy documentation as to the Group’s high- level policies and procedures relating to: ◦ detecting and responding to the risks of fraud as well as whether they have knowledge of any actual, suspected or alleged fraud; and ◦ the internal controls established to mitigate risks related to fraud, including the appropriateness and impact of changes made to these controls to facilitate remote/hybrid working; • The Group’s remuneration policies and key drivers for remuneration and bonus levels; and • Discussions among the engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud. The engagement team includes audit partners and staff who have extensive experience of working with banks, and this experience was relevant to the discussion about where fraud risks may arise. The discussions also involved our forensic specialists to assist us in identifying fraud risks based on discussions of the circumstances of the Group and Company, including consideration of fraudulent schemes that had arisen in similar sectors and industries. The forensic specialists participated in the initial fraud risk assessment discussions and were consulted as required where further guidance was necessary. Fraud risk communication We communicated identified fraud risks throughout the audit team and we remained alert to any indications of fraud throughout the audit. This included communication from the Group to component audit teams of relevant fraud risks identified at the Group level. Fraud risks and our procedures to address them We identified four fraud risks which were communicated to component audit teams. The nature of these fraud risks is substantially unchanged from the prior year. The fraud risks we identified are set out below: 1. IFRS 9 ECL: Judgemental qualitative adjustments made to the ECL provision 2. Valuations - risk relating to unobservable pricing inputs used to price level 3 fair value instruments 3. Existence and accuracy of unconfirmed over-the-counter bilateral derivatives 4. The risk of management override of controls, common with all audits under ISAs (UK). As required by auditing standards and taking into account our overall knowledge of the control environment, we performed procedures to address the above risks, the risk that Group and component management may be in a position to make inappropriate accounting entries and the risk of bias in accounting estimates and judgements. On this audit, we have not identified a significant risk of fraud related to revenue recognition for the Group as a whole. However, we have identified a fraud risk in relation to revenue recognition within some of the individual components. Our audit procedures included evaluating the design and implementation and operating effectiveness of relevant internal controls, assessing significant accounting estimates for bias, as well as substantive procedures to address the fraud risks. These procedures also included identifying journal entries to test based on risk criteria and comparing the identified entries to supporting documentation. Incorporating unpredictability into our audit: A requirement of the auditing standards is that we undertake procedures which are deliberately unexpected and could not have reasonably been predicted by Barclays’ management. As an example, we update our criteria for selecting journals with a higher risk of management override for testing each year so that the selection criteria do not become predictable. Outside of journals, for a selection of fair value financial instruments, we performed intra-month independent re-pricing to incorporate an element of unpredictability in our audit procedures. Link to key audit matters Further details of the testing we perform over the identified fraud risks for ECL and fair value of financial instruments are included in the respective key audit matters sections 4.1 and 4.2 of this report, as the procedures relating to those estimates also address the risk of fraud. Laws and regulations - identifying and responding to risks of material misstatement due to non-compliance with laws and regulations Risk assessment We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements. For this risk assessment, matters considered include the following: • our general commercial and sector experience; • inquiries with the directors and other management (as required by auditing standards); • inspection of the Group’s key regulatory and legal correspondence; • inspection of the policies and procedures regarding compliance with laws and regulations; • relevant discussions with the Group’s external legal counsel; • relevant discussions with the Group’s key regulatory supervisors including the Prudential Regulation Authority, Financial Conduct Authority, Federal Reserve Board, Federal Deposit Insurance Corporation and the Joint Supervisory Team; and • the Group’s own assessment of the risks of non-compliance with laws and regulations, and the internal controls established to mitigate these. This assessment was considered and approved by the Board. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 408 KPMG LLP’s independent auditor’s report to the members of Barclays PLC (continued) Most significant indirect law/ regulation areas Secondly, the Group is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines, remediation payments or litigation, or the loss of the Group’s permission to operate in countries where the non-adherence to laws could prevent trading in such countries. We identified the following areas as those most likely to have such an effect: • Specific aspects of regulatory capital and liquidity requirements • Other banking laws and regulations, including securities issuance law • Customer conduct rules • Money laundering • Sanctions list and financial crime • Market abuse regulations • Certain aspects of companies legislation recognising the financial and regulated nature of the Group’s activities. Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors and other management and inspection of regulatory and legal correspondence, if any. If a breach of operational regulations is not disclosed to us or evident from relevant correspondence, an audit will not detect that breach. Our risk assessment also considered instances of non-compliance with laws and regulations and enforcement actions against the Group during the year and specifically those that could reasonably be expected to have a material effect on the financial statements. As the Group operates in a highly regulated environment, our assessment of risks of material misstatement also considered the control environment, including the Group’s higher-level procedures for complying with regulatory requirements. Our assessment included inspection of key frameworks, policies and standards in place, understanding and evaluating the role of the compliance function in establishing these and monitoring compliance and testing of related controls around whistleblowing and complaints. Risk communication Our identified laws and regulations risks was communicated throughout our team and we remained alert to any indications of non-compliance throughout the audit. This included communication from the Group to component audit teams of relevant laws and regulations identified at Group level. Direct laws context and link to audit The potential effect of these laws and regulations on the financial statements varies considerably. Firstly, the Group is subject to laws and regulations that directly impact the financial statements including: • financial reporting legislation (including related companies’ legislation); • distributable profits legislation; and • taxation legislation (direct and indirect). We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items. Audit response In relation to the legal, competition and regulatory matters disclosed in note 25 we performed audit procedures which included making enquiries of Barclays’ internal counsel and inspection of minutes of meetings and of regulatory correspondence. For a subset of these matters which we deemed to be more significant we also made enquiries of external counsel and obtained legal confirmations from Barclays’ external counsel. In respect of regulatory matters relating to conduct risk as disclosed in note 25 our procedures included inspection of regulatory correspondence, independent enquiry of the Group’s main regulators and performing audit procedures to respond to risks of material misstatement identified in recognised conduct provisions. Context of the ability of the audit to detect fraud or breaches of law or regulation Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of fraud, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect non-compliance with all laws and regulations. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 409 KPMG LLP’s independent auditor’s report to the members of Barclays PLC (continued) 6. Our determination of materiality The scope of our audit was influenced by our application of materiality. We set quantitative thresholds and overlay qualitative considerations to help us determine the scope of our audit and the nature, timing and extent of our procedures, and in evaluating the effect of misstatements, both individually and in the aggregate, on the financial statements as a whole. Materiality for the financial statements as a whole 2023: £350m 2022: £275m What we mean A quantitative reference for the purpose of planning and performing our audit Basis for determining materiality and judgements applied We have determined overall materiality for the Barclays PLC Group to be £350m (FY22: £275m). We determined that profit before tax (PBT) remains the key benchmark for the Barclays PLC Group. We selected PBT as the benchmark because it is the metric in the primary statements which best reflects the focus of the users of the financial statements. During FY23, Barclays PLC took actions that resulted in significant additional costs of £927m in Q4 as disclosed in note 7. These are one-off costs to help drive future returns. Given the nature of these costs, we normalised PBT by adding back these items because they do not represent the normal, continuing operations of the Group. As such, for FY23 we based our Group materiality on Group normalised PBT of £7,484m (2022: £7,012m). Our Group materiality of £350m (2022: £275m) was determined by applying a percentage to normalised PBT. When using a profit-related measure to determine overall materiality, KPMG’s approach is to apply a percentage between 3% and 5% to the measure. In setting overall materiality, we applied a percentage of 4.7% (2022: 3.9%) of the benchmark. Materiality for the parent company financial statements as a whole was set at £170m (2022: £100m), which is the component materiality for the parent company determined by the group audit engagement team. This is lower than the materiality we would otherwise have determined with reference to a benchmark of net assets of which it represents 0.3% (FY22: 0.2%). Performance materiality 2023: £227m 2022: £179m What we mean Our procedures on individual account balances and disclosures were performed to a lower threshold, performance materiality, so as to reduce, to an acceptable level, the risk that individually immaterial misstatements in individual account balances add up to a material amount across the financial statements as a whole. Basis for determining performance materiality and judgements applied We have considered performance materiality at a level of 65% (2022: 65%) of materiality for Barclays PLC Group’s financial statements as a whole to be appropriate. The Parent Company performance materiality was set at £110m (FY22: £65m) which equates to 65% (FY22: 65%) of materiality for the Parent Company financial statements as a whole. We applied this percentage in our determination of performance materiality based on the level of control deficiencies during the prior period. Audit misstatement posting threshold 2023: £17m 2022: £13m What we mean This is the amount below which identified misstatements are considered to be clearly trivial from a quantitative point of view. We may become aware of differences below this threshold which could alter the nature, timing and scope of our audit procedures, for example if we identify smaller differences which are indicators of fraud. This is also the amount above which all differences identified are communicated to Barclays PLC’s Board Audit Committee. Basis for determining the audit misstatement reporting threshold and judgements applied The audit misstatement posting threshold has been set at a level of 5% (2022: 5%) of materiality for Barclays PLC’s Group financial statements. We also report to the Audit Committee any other identified misstatements that warrant reporting on qualitative grounds. The overall materiality for the Group financial statements of £350m (2022: £275m) compares as follows to the other main financial statement elements amounts. Total Revenue Total Assets Net Assets 2023 2022 2023 2022 2023 2022 Group Materiality as % of caption £25,378m £24,956m £1,477,487m £1,513,699m £71,864m £69,260m 0.40% 0.02 % 0.49 % 1.38 % 1.10% 0.02% Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 410 KPMG LLP’s independent auditor’s report to the members of Barclays PLC (continued) 7. The scope of our audit Group scope What we mean How the Group audit team determined the procedures to be performed across the Group. We have subjected four (2022: four) of the Group’s components to full scope audits for Group purposes. Our approach to scoping the four components was as follows: • For two components, Barclays Bank UK PLC and Barclays Execution Services Limited Solus, we directly instructed the component audit teams to conduct and report to us on full scope audits in 2023 and 2022; • The third component, Barclays PLC Solus was subject to a full scope audit by us in 2023 and 2022; and • The fourth component, Barclays Bank PLC sub-group, was subject to a full scope audit by us in 2023 and 2022, as detailed below. In addition, the group has a large number of other components, and we performed specified, risk-focused audit procedures over some account balances selected from amongst those components. The components over which we performed work represented 0.19% (2022: 7.68%) of Barclays PLC Group’s total income and 0.26% (2022: 0.24%) of the Group’s total assets. Within the Barclays Bank PLC sub-group we specified components as follows: • Barclays Bank Solus to be subject to a full scope audit carried out by us in 2023 and 2022; • Barclays Bank Delaware and Barclays Capital Inc to be subject to a full scope audit as instructed by us in 2023 and 2022; and • Barclays Bank Ireland PLC and Barclays Capital Securities Limited to be subject to an audit of certain account balances as instructed by us in 2023 and 2022. The components within the scope of our work accounted for the percentages illustrated in section 2 – Group scope. Barclays PLC has centralised certain Group-wide processes in a shared service centre in India, the outputs of which are included in the financial information of the reporting components it services and therefore it is not a separate reporting component. This service centre is subject to specified audit procedures, predominantly the testing of transaction processing, reconciliations and review controls. Additional procedures are performed at certain reporting components to address the audit risks not covered by the work performed by the shared service centre. The Group audit team has also performed certain audit procedures on the following areas on behalf of relevant components: • Testing of IT systems and automated business controls; and • Operating expenses and Group recharges. The Group team communicated the results of these procedures to the applicable component teams. In addition, we have performed Group level analysis on the remaining components to determine whether further risks of material misstatement exist in those components. We were able to rely upon the Group's internal control over financial reporting in all areas of our audit, and where our controls testing supported this approach, which enabled us to reduce the scope of our substantive audit work. Group audit team oversight What we mean The extent of the Group audit team’s involvement in component audits. A hybrid communication and oversight strategy was implemented between the Group audit team and the components during the year. This included: • A global planning conference held in London and led by the Group audit team to discuss key audit risks and obtain input from component teams and other participating locations. • The components in scope for Group reporting purposes were either visited by the Group audit team to assess the audit risk and strategy, or such review occurred remotely. Throughout the audit, we inspected the components’ key working papers to understand and challenge the audit approach and audit findings of each component, the findings reported to the Group team were discussed in more detail, and any further work required by the Group team was then performed by the component auditors. • Instructions issued by the Group audit team to component auditors setting out the significant areas to be covered, including the relevant key audit matters identified above and the information to be reported back to the Group audit team. For example, minimum criteria for high-risk journals were set by the Group team and applied consistently across the audit. • Review and approval by the Group audit team of the component materiality for all components. • Risk assessment and challenge sessions with each component audit team were held in the planning, interim and final phases of the audit, led by the Group lead engagement partner and audit quality partner. • Monthly video conferences with the partners and directors of the Group and component audit teams along with regular ad hoc contact in person and via video calls and email exchanges to challenge the component audit approach and findings. • Stuart Crisp, the Group Lead Engagement Partner (and Senior Statutory Auditor), attended each Board Audit Committee and Board Risk Committee for Barclays PLC and Barclays Bank PLC and at least one Board Audit Committee for Barclays Bank UK, Barclays Bank Europe, and the IHC covering Barclays Capital Inc. and Barclays Bank Delaware. The materiality levels applied to the audits of the components of Barclays PLC are as follows: Scope Number of components Range of materiality applied Full scope audit 4 £135m - £230m Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 411 KPMG LLP’s independent auditor’s report to the members of Barclays PLC (continued) 8. Other information in the annual report Directors’ remuneration report Our responsibility The directors are responsible for the other information presented in the Annual Report together with the financial statements. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except as explicitly stated below, any form of assurance conclusion thereon. All other information Our responsibility Our responsibility is to read the other information and, in doing so, consider whether, based on our financial statements audit work, the information therein is materially misstated or inconsistent with the financial statements or our audit knowledge. Our reporting Based solely on that work we have not identified material misstatements or inconsistencies in the other information. Strategic report and Directors’ report Our responsibility and reporting Based solely on our work on the other information described above we report to you as follows: • we have not identified material misstatements in the strategic report and the Directors’ Report; • in our opinion the information given in those reports for the financial year is consistent with the financial statements; and • in our opinion those reports have been prepared in accordance with the Companies Act 2006. We are required to form an opinion as to whether the part of the Directors’ remuneration report to be audited has been properly prepared in accordance with the Companies Act 2006. Our reporting In our opinion the part of the Directors’ remuneration report to be audited has been properly prepared in accordance with the Companies Act 2006. Corporate governance disclosures Our responsibility We are required to perform procedures to identify whether there is a material inconsistency between the financial statements and our audit knowledge, and: • the directors’ statement that they consider that the annual report and financial statements taken as a whole is fair, balanced and understandable, and provides the information necessary for shareholders to assess the Group’s position and performance, business model and strategy; • the section of the annual report describing the work of the Board Audit Committee, including the significant issues that the Board Audit Committee considered in relation to the financial statements, and how these issues were addressed; and Our reporting Based on those procedures, we have concluded that each of these disclosures is materially consistent with the financial statements and our audit knowledge. We are also required to review the part of Corporate Governance Statement relating to the Group’s compliance with the provisions of the UK Corporate Governance Code specified by the Listing Rules for our review. We have nothing to report in this respect. Other matters on which we are required to report by exception Our responsibility Under the Companies Act 2006, we are required to report to you if, in our opinion: • adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not been received from branches not visited by us; or • the Parent Company financial statements and the part of the Directors’ remuneration report to be audited are not in agreement with the accounting records and returns; or • certain disclosures of directors’ remuneration specified by law are not made; or • we have not received all the information and explanations we require for our audit. • the section of the annual report that Our reporting describes the review of the effectiveness of the Group’s risk management and internal control systems. We have nothing to report in this respect. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 412 KPMG LLP’s independent auditor’s report to the members of Barclays PLC (continued) 10. The purpose of our audit work and to whom we owe our responsibilities This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and the terms of our engagement by the Company. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and the further matters we are required to state to them in accordance with the terms agreed with the Company, and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members, as a body, for our audit work, for this report, or for the opinions we have formed. Stuart Crisp (Senior Statutory Auditor) for and on behalf of KPMG LLP, Statutory Auditor Chartered Accountants 15 Canada Square London E14 5GL 19 February 2024 9. Respective responsibilities Directors’ responsibilities As explained more fully in their statement set out on page 190, the Directors are responsible for: the preparation of the financial statements including being satisfied that they give a true and fair view; such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error; assessing the Group and Parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and using the going concern basis of accounting unless they either intend to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue our opinion in an auditor’s report. Reasonable assurance is a high level of assurance but does not guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements. A fuller description of our responsibilities is provided on the FRC’s website at frc.org.uk/auditorsresponsibilities. The Company is required to include these financial statements in an annual financial report prepared using the single electronic reporting format specified in the TD ESEF Regulation. The auditor’s report provides no assurance over whether the financial report has been prepared in accordance with that format. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 413 Consolidated financial statements Consolidated income statement For the year ended 31 December Interest and similar income Interest and similar expense Net interest income Fee and commission income Fee and commission expense Net fee and commission income Net trading income Net investment income/(expense) Other income Total income Staff costs Infrastructure costs Administration and general expenses Litigation and conduct Operating expenses Share of post-tax results of associates and joint ventures Profit before impairment Credit impairment (charges)/releases Profit before tax Taxation Profit after tax Attributable to: Equity holders of the parent Other equity instrument holders Total equity holders of the parent Non-controlling interests Profit after tax Earnings per share Basic earnings per ordinary share Diluted earnings per share Notes 3 3 4 4 5 6 30 7 7 7 7 8 9 29 10 10 2023 £m 35,075 (22,366) 12,709 10,121 (3,592) 6,529 5,945 61 134 25,378 (10,017) (4,095) (2,782) (37) (16,931) (9) 8,438 (1,881) 6,557 (1,234) 5,323 4,274 985 5,259 64 5,323 p 27.7 26.9 2022 £m 19,096 (8,524) 10,572 9,637 (3,038) 6,599 8,049 (434) 170 24,956 (9,252) (3,435) (2,446) (1,597) (16,730) 6 8,232 (1,220) 7,012 (1,039) 5,973 5,023 905 5,928 45 5,973 p 30.8 29.8 2021 £m 11,240 (3,167) 8,073 9,880 (2,206) 7,674 5,794 311 88 21,940 (8,511) (3,614) (2,137) (397) (14,659) 260 7,541 653 8,194 (1,138) 7,056 6,205 804 7,009 47 7,056 p 36.5 35.6 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 414 Consolidated financial statements (continued) 2023 £m 5,323 2022 £m 5,973 Consolidated statement of comprehensive income For the year ended 31 December Profit after tax Other comprehensive income/(loss) that may be recycled to profit or loss: Currency translation reserve 1 Currency translation differences Tax Fair value through other comprehensive income reserve movements relating to debt securities Net gains/(losses) from changes in fair value Net (gains)/losses transferred to net profit on disposal Net (gains)/losses relating to (releases of) impairment Net (losses)/gains due to fair value hedging Tax Cash flow hedging reserve Net gains/(losses) from changes in fair value Net losses/(gains) transferred to net profit Tax Other comprehensive income/(loss) that may be recycled to profit or loss Other comprehensive income/(loss) not recycled to profit or loss: Retirement benefit remeasurements Fair value through other comprehensive income reserve movements relating to equity instruments Own credit Tax Other comprehensive (loss)/income not recycled to profit or loss Other comprehensive income/(loss) for the year Total comprehensive income for the year Attributable to: Equity holders of the parent Non-controlling interests Total comprehensive income for the year Note 1 Includes nil gain (2022: £1m gain; 2021: £26m loss ) on recycling of currency translation differences to net profit. (1,110) 9 1,486 (26) (1) (1,184) (78) 4,447 423 (1,342) 2,624 (1,193) (3) (983) 611 (1,568) 1,056 6,379 6,315 64 6,379 2021 £m 7,056 (131) — (1,668) (305) (8) 1,354 198 (2,280) (1,173) 1,025 (2,988) 1,298 141 (106) (563) 770 2,032 — (7,516) 111 9 5,452 523 (9,052) 339 2,331 (5,771) (754) 228 2,092 (156) 1,410 (4,361) (2,218) 1,612 4,838 1,567 45 1,612 4,791 47 4,838 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 415 Consolidated financial statements (continued) Consolidated balance sheet As at 31 December Assets Cash and balances at central banks Cash collateral and settlement balances Debt securities at amortised cost Loans and advances at amortised cost to banks Loans and advances at amortised cost to customers Reverse repurchase agreements and other similar secured lending at amortised cost Trading portfolio assets Financial assets at fair value through the income statement Derivative financial instruments Financial assets at fair value through other comprehensive income Investments in associates and joint ventures Goodwill and intangible assets Property, plant and equipment Current tax assets Deferred tax assets Retirement benefit assets Assets included in disposal group classified as held for sale Other assets Total assets Liabilities Deposits at amortised cost from banks Deposits at amortised cost from customers Cash collateral and settlement balances Repurchase agreements and other similar secured borrowing at amortised cost Debt securities in issue Subordinated liabilities Trading portfolio liabilities Financial liabilities designated at fair value Derivative financial instruments Current tax liabilities Deferred tax liabilities Retirement benefit liabilities Provisions Liabilities included in disposal group classified as held for sale Other liabilities Total liabilities Equity Called up share capital and share premium Other equity instruments Other reserves Retained earnings Total equity excluding non-controlling interests Non-controlling interests Total equity Total liabilities and equity Notes 12 13 14 15 35 21 19 9 32 40 26 12 16 14 9 32 23 40 22 27 27 28 29 2023 £m 224,634 108,889 56,749 9,459 333,288 2,594 174,605 206,651 256,836 71,836 879 7,794 3,417 121 5,960 3,667 2022 £m 256,351 112,597 45,487 10,015 343,277 776 133,813 213,568 302,380 65,062 922 8,239 3,616 385 6,991 4,743 3,916 6,192 1,477,487 — 5,477 1,513,699 14,472 524,317 94,084 41,601 96,825 10,494 58,669 297,539 250,044 529 22 266 1,584 3,164 12,013 1,405,623 4,288 13,259 (77) 53,734 71,204 660 71,864 1,477,487 19,979 525,803 96,927 27,052 112,881 11,423 72,924 271,637 289,620 580 16 264 1,544 — 13,789 1,444,439 4,373 13,284 (2,192) 52,827 68,292 968 69,260 1,513,699 The Board of Directors approved the financial statements on pages 413 to 508 on 19 February 2024. Nigel Higgins Group Chairman C.S. Venkatakrishnan Group Chief Executive Anna Cross Group Finance Director Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 416 Consolidated financial statements (continued) Consolidated statement of changes in equity Called up share capital and share premium1 £m 4,373 Other equity instruments1 Other reserves2 £m £m Retained earnings £m 13,284 (2,192) 52,827 — 4,274 Total equity excluding non- controlling interests Non-controlling interests Total equity 13,259 (77) 53,734 71,204 4,536 12,259 — — — — — — — 124 — — — — — (209) — 4,288 — — — — — — — 70 — — — — — — (233) — — 985 — — — — — 985 — (30) (985) — — — — 5 905 — — — — — (1,101) 194 3,528 — (710) 1,911 — — — (285) 277 — 209 3 1,770 — 2,032 (1,193) (6,382) — 1,463 905 (4,080) — 1,032 (905) — — — — — — (7) — — — (84) (248) 253 — 233 (36) — £m 68,292 5,259 (1,101) 194 3,528 (855) (710) 6,315 — — — (855) — 3,419 497 621 (38) — — (506) (1,210) (1,257) 2 (68) (985) (285) (229) (1,210) (1,257) 10 50,487 5,023 — — — (281) — 4,742 69,052 5,928 2,032 (1,193) (6,382) (281) 1,463 1,567 476 546 28 — 84 — (485) (1,028) (1,508) 36 (5) 1,060 (905) — (248) (232) (1,028) (1,508) — (12) 4,373 13,284 (2,192) 52,827 68,292 £m 968 64 — — — — — 64 — (312) — — — (64) — 4 660 £m 69,260 5,323 (1,101) 194 3,528 (855) (710) 6,379 621 (380) (985) (285) (229) (1,274) (1,257) 14 71,864 989 70,041 45 — — — — — 45 — (20) — — — — (45) — — (1) 968 5,973 2,032 (1,193) (6,382) (281) 1,463 1,612 546 1,040 (905) — (248) (232) (1,073) (1,508) — (13) 69,260 Balance as at 1 January 2023 Profit after tax Currency translation movements Fair value through other comprehensive income reserve Cash flow hedges Retirement benefit remeasurements Own credit reserve Total comprehensive income for the year Employee share schemes and hedging thereof Issue and redemption of other equity instruments Other equity instruments coupons paid Increase in treasury shares Vesting of shares under employee share schemes Dividends paid Repurchase of shares Other reserve movements Balance as at 31 December 2023 Balance as at 1 January 2022 Profit after tax Currency translation movements Fair value through other comprehensive income reserve Cash flow hedges Retirement benefit remeasurements Own credit reserve Total comprehensive income for the year Employee share schemes and hedging thereof Issue and redemption of other equity instruments Other equity instruments coupons paid Disposal of Absa holding Increase in treasury shares Vesting of shares under employee share schemes Dividends paid Repurchase of shares Own credit realisation Other reserve movements Balance as at 31 December 2022 Notes 1 For further details refer to Note 27. 2 For further details refer to Note 28. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 417 Consolidated financial statements (continued) Consolidated cash flow statement For the year ended 31 December Notes Reconciliation of profit before tax to net cash flows from operating activities: Profit before tax Adjustment for non-cash items: Credit impairment charges/(releases) Depreciation, amortisation and impairment of property, plant, equipment and intangibles Other provisions, including pensions Net loss on disposal of investments and property, plant and equipment Other non-cash movements including exchange rate movements Changes in operating assets and liabilities Net decrease/(increase) in cash collateral and settlement balances Net decrease/(increase) in loans and advances at amortised cost Net (increase)/decrease in reverse repurchase agreements and other similar secured lending Net (decrease)/increase in deposits at amortised cost Net (decrease)/increase in debt securities in issue Net increase/(decrease) in repurchase agreements and other similar secured borrowing Net decrease/(increase) in derivative financial instruments Net (increase)/decrease in trading portfolio assets Net (decrease)/increase in trading portfolio liabilities Net (decrease)/increase in financial assets and liabilities at fair value through the income statement Net increase in other assets Net (decrease)/increase in other liabilities Corporate income tax paid Net cash from operating activities Purchase of debt securities at amortised cost Proceeds from redemption or sale of debt securities at amortised cost Purchase of financial assets at fair value through other comprehensive income Proceeds from sale or redemption of financial assets at fair value through other comprehensive income Purchase of property, plant and equipment and intangibles (Acquisition of business)/Disposal of subsidiary net of cash disposed Other cash flows associated with investing activities Net cash from investing activities 2023 £m 6,557 1,881 2,147 482 11 10,729 1,165 10,947 (1,818) (6,958) (19,640) 14,549 5,968 (40,792) (14,255) 32,819 (1,521) (2,362) (836) (927) (19,977) 7,332 (66,415) 59,756 (1,718) (2,415) 23 Dividends paid and other coupon payments on equity instruments Issuance of subordinated liabilities Redemption of subordinated liabilities Issue of shares and other equity instruments Repurchase of shares and other equity instruments 1 Issuance of debt securities 1 Redemption of debt securities Net purchase of treasury shares Net cash from financing activities Effect of exchange rates on cash and cash equivalents Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year Cash and cash equivalents comprise: 2022 £m 2021 £m 7,012 8,194 1,220 1,786 1,724 54 (13,298) (653) 2,076 468 39 3,093 (881) (24,949) 2,451 26,349 9,210 (1,300) (7,071) 13,222 18,755 (919) (3,497) 1,051 (688) 30,231 (27,731) 14,277 (69,380) 62,821 (1,746) — 86 4,101 (10,728) 5,804 38,397 18,131 14,178 (4,018) (19,085) 6,764 (15,626) (2,133) 1,252 (1,335) 48,919 (12,500) 3,757 (75,673) 89,342 (1,720) 1,057 7 4,270 (1,360) 1,890 (4,807) 1,118 (1,275) 8,415 (3,475) (399) 107 (4,232) 49,064 210,142 259,206 26 26 (23,414) (2,259) 1,523 (2,239) 3,251 (4,750) 9,836 (6,252) (499) (1,389) (5,053) (30,783) (21,673) (1,978) 1,477 (2,679) 3,205 (3,655) 11,139 (6,335) (478) 696 10,330 19,584 259,206 278,790 278,790 248,007 Cash and balances at central banks Loans and advances to banks with original maturity less than three months Cash collateral balances with central banks with original maturity less than three months Treasury and other eligible bills with original maturity less than three months Cash and cash equivalents at end of year 224,634 6,639 15,450 1,284 248,007 256,351 6,431 15,150 858 278,790 238,574 6,488 13,532 612 259,206 Note 1 Issuance of debt securities and Redemption of debt securities included in financing activities relate to instruments that qualify as eligible liabilities and satisfy regulatory requirements for MREL instruments which came into effect during 2019. Refer to Note 1, paragraph 4(vi), for further details. Interest received was £62,298m (2022: £40,975m; 2021: £17,194m) and interest paid was £48,246m (2022: £28,709m; 2021: £8,063m). These amounts include interest paid and received arising from trading activities. Dividends received were £0m (2022: £31m; 2021: £20m). The Group is required to maintain balances with central banks and other regulatory authorities. These amounted to £3,758m (2022: £3,457m; 2021: £4,750m) and are included within the Cash and cash equivalents. For the purposes of the cash flow statement, cash comprises cash on hand and demand deposits and cash equivalents comprise highly liquid investments that are convertible into cash with an insignificant risk of changes in value with original maturities of three months or less. Repurchase and reverse repurchase agreements are not considered to be part of cash equivalents. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 418 Parent company accounts Statement of comprehensive income For the year ended 31 December Dividend received from subsidiaries Net interest expense Other income/ (expense) Impairment reversal of investment in subsidiary Operating expenses Profit before tax Taxation Profit after tax Other comprehensive income Total comprehensive income Profit after tax attributable to: Ordinary equity holders Other equity instrument holders Profit after tax Total comprehensive income attributable to: Ordinary equity holders Other equity instrument holders Total comprehensive income Notes 42 42 42 2023 £m 2,818 (11) 1,174 — (296) 3,685 81 3,766 — 3,766 2,781 985 3,766 2,781 985 3,766 2022 £m 2,797 (163) (654) — (257) 1,723 440 2,163 — 2,163 1,258 905 2,163 1,258 905 2,163 2021 £m 1,356 (161) 659 2,573 (160) 4,267 76 4,343 — 4,343 3,539 804 4,343 3,539 804 4,343 For the year ended 31 December 2023, profit after tax was £3,766m (2022: £2,163m, 2021: £4,343m) and total comprehensive income was £3,766m (2022: £2,163m, 2021: £4,343m). The Company has 61 members of staff (2022: 61, 2021: 65). Balance sheet As at 31 December Assets Investment in subsidiaries Loans and advances to subsidiaries Financial assets at fair value through the income statement Derivative financial instruments Other assets Total assets Liabilities Deposits at amortised cost Debt securities in issue Subordinated liabilities Financial liabilities designated at fair value Derivative financial instruments Other liabilities Total liabilities Equity Called up share capital Share premium account Other equity instruments Other reserves Retained earnings Total equity Total liabilities and equity Notes 42 42 42 42 42 42 42 42 42 42 2023 £m 64,461 18,926 35,787 33 407 119,614 542 18,308 10,018 31,832 711 175 61,586 3,789 499 13,198 997 39,545 58,028 119,614 2022 £m 64,544 23,628 28,930 31 402 117,535 544 24,086 11,230 22,971 906 131 59,868 3,968 405 13,250 788 39,256 57,667 117,535 The financial statements on pages 418 to 420 and the accompanying note on page 503 were approved by the Board of Directors on 19 February 2024 and signed on its behalf by: Nigel Higgins Group Chairman C.S.Venkatakrishnan Group Chief Executive Anna Cross Group Finance Director Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 419 Parent company accounts (continued) Statement of changes in equity Balance as at 1 January 2023 Profit after tax and other comprehensive income Issue of shares under employee share schemes Issue and exchange of other equity instruments Vesting of shares under employee share schemes Dividends paid Other equity instruments coupons paid Repurchase of shares Balance as at 31 December 2023 Balance as at 1 January 2022 Profit after tax and other comprehensive income Issue of shares under employee share schemes Issue and exchange of other equity instruments Vesting of shares under employee share schemes Dividends paid Other equity instruments coupons paid Repurchase of shares Balance as at 31 December 2022 Called up share capital and share premium £m 4,373 — 124 — — — — (209) 4,288 4,536 — 70 — — — — (233) 4,373 Other equity instruments £m 13,250 985 — (52) — — (985) — 13,198 12,241 905 — 1,009 — — (905) — 13,250 Other reserves Retained earnings Total equity £m 788 — — — — — — 209 997 555 — — — — — — 233 788 £m 39,256 2,781 22 (25) (22) (1,210) — (1,257) 39,545 40,505 1,258 34 17 (22) (1,028) — (1,508) 39,256 £m 57,667 3,766 146 (77) (22) (1,210) (985) (1,257) 58,028 57,837 2,163 104 1,026 (22) (1,028) (905) (1,508) 57,667 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 420 Parent company accounts (continued) Cash flow statement For the year ended 31 December Reconciliation of profit before tax to net cash flows from operating activities: Profit before tax Adjustment for non-cash items: Reversal of impairment of subsidiary Other non-cash items Changes in operating assets and liabilities Net cash generated from operating activities 1 Net increase in loans and advances to subsidiaries of the parent Capital contribution to and investment in subsidiary Net cash used in investing activities Issue of shares and other equity instruments Redemption of other equity instruments 2 Net increase in debt securities in issue Proceeds of borrowings and issuance of subordinated debt Repurchase of shares Dividends paid Coupons paid on other equity instruments Net cash (used in)/generated from financing activities Net increase in cash equivalents Cash equivalents at beginning of year Cash equivalents at end of year3 Net cash generated from operating activities includes: Dividends received Net interest paid Notes 2023 £m 3,685 — (627) 17 3,075 (2,587) 83 (2,504) 3,251 (3,181) 3,585 (764) (1,257) (1,210) (985) (561) 10 476 486 2,818 (11) 2022 £m 2021 £m 1,723 4,267 — 868 1,037 3,628 (5,087) (1,769) (6,856) 3,180 (2,097) 4,813 1,000 (1,508) (1,028) (905) 3,455 227 249 476 (2,573) 383 17 2,094 (6,118) (1,083) (7,201) 1,114 — 4,939 1,579 (1,200) (512) (804) 5,116 9 240 249 2,797 (163) 1,356 (161) 1 Includes financial assets at fair value through the income statement. 2 Includes financial liabilities designated at fair value. 3 Cash equivalents comprise loans and advances to banks with original maturity of three months or less, contained within loans and advances to subsidiaries. The Parent company’s principal activity is to hold the investment in its wholly-owned subsidiaries, Barclays Bank PLC, Barclays Bank UK PLC, Barclays Execution Services Limited and Barclays Principal Investments Limited. Dividends received are treated as operating income. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 421 Notes to the financial statements For the year ended 31 December 2023 This section describes the Group’s material policies and critical accounting estimates that relate to the financial statements and notes as a whole. If an accounting policy or a critical accounting estimate relates to a particular note, the accounting policy and/or critical accounting estimate is contained with the relevant note. 1 Material accounting policies 1. Reporting entity Barclays PLC is a public company limited by shares registered in England under company number 48839, having its registered office at 1 Churchill Place, London, E14 5HP. These financial statements are prepared for Barclays PLC and its subsidiaries (the Group) under Section 399 of the Companies Act 2006. The Group is a major global financial services provider engaged in retail banking, credit cards, wholesale banking, investment banking, wealth management and investment management services. In addition, separate financial statements have been presented for the holding company. 2. Compliance with International Financial Reporting Standards The consolidated financial statements of the Group, and the separate financial statements of Barclays PLC, have been prepared in accordance with UK-adopted international accounting standards. The consolidated financial statements of the Group, and the separate financial statements of Barclays PLC, have also been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), including interpretations issued by the IFRS Interpretations Committee, as there are no applicable differences from IFRS as issued by the IASB for the periods presented. The principal accounting policies applied in the preparation of the consolidated and separate financial statements are set out below, and in the relevant notes to the financial statements. These policies have been consistently applied, with the exception of International Tax Reform-Pillar Two Model Rules (Amendments to IAS 12), which is effective from 1 January 2023 and applies retrospectively; and the Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2), and Definition of an Accounting Estimate (Amendments to IAS 8) which were applied from 1 January 2023. 3. Basis of preparation The consolidated and separate financial statements have been prepared under the historical cost convention modified to include the fair valuation of investment property, and particular financial instruments, to the extent required or permitted under IFRS as set out in the relevant accounting policies. These financial statements are stated in millions of Pounds Sterling (£m), the functional currency of Barclays PLC. The financial statements have been prepared for Barclays PLC and its subsidiaries (the Group) under Section 399 of the Companies Act 2006 as applicable to companies using IFRS. The financial statements are prepared on a going concern basis, as the Board is satisfied that the Group and the parent company have the resources to continue in business for a period of at least 12 months from approval of the financial statements. In making this assessment, the Board has considered a wide range of information relating to present and future conditions and includes a review of a working capital report (WCR). The WCR is used by the Board to assess the future performance of the Group and that it has the resources in place that are required to meet its ongoing regulatory requirements. The assessment is based upon business plans which contain future projections of profitability taken from the Group’s medium-term plan as well as projections of regulatory capital requirements and business funding needs. The WCR also includes an assessment of the impact of internally generated stress testing scenarios on the liquidity and capital requirement forecasts. The stress tests used were based upon an assessment of reasonably possible downside economic scenarios that the Group could experience. Further details are set out in the Viability statement on page 54. The WCR showed that the Group had sufficient capital and liquidity in place to support its future business requirements and remained above its regulatory minimum requirements in the stress scenarios. Accordingly, the Directors concluded that there was a reasonable expectation that the Group and parent company has adequate resources to continue as a going concern for a period of at least 12 months from the date of approval of the financial statements. 4. Accounting policies The Group prepares financial statements in accordance with IFRS. The Group’s material accounting policies relating to specific financial statement items, together with a description of the accounting estimates and judgements that were critical to preparing those items, are set out under the relevant notes. Accounting policies that affect the financial statements as a whole are set out below. (i) Consolidation The consolidated financial statements combine the financial statements of Barclays PLC and all its subsidiaries. Subsidiaries are entities over which Barclays PLC has control. The Group has control over another entity when the Group has all of the following: 1) power over the relevant activities of the investee, for example through voting or other rights 2) exposure to, or rights to, variable returns from its involvement with the investee, and 3) the ability to affect those returns through its power over the investee. As the consolidated financial statements include partnerships where the Group member is a partner, advantage has been taken of the exemption under Regulation 7 of the Partnership (Accounts) Regulations 2008 with regard to preparing and filing of individual partnership financial statements. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 422 Notes to the financial statements (continued) For the year ended 31 December 2023 Details of the principal subsidiaries are given in Note 33. (ii) Foreign currency translation Transactions in foreign currencies are translated into Sterling at the rate ruling on the date of the transaction. Foreign currency monetary balances are translated into Sterling at the period end exchange rates. Exchange gains and losses on such balances are taken to the income statement. The Group’s foreign operations (including subsidiaries, joint ventures, associates and branches) based mainly outside the UK may have different functional currencies. The functional currency of an operation is the currency of the main economy to which it is exposed. Prior to consolidation (or equity accounting) the assets and liabilities of non-Sterling operations are translated at the period end exchange rate and items of income, expense and other comprehensive income are translated into Sterling at the rate on the date of the transactions. Exchange differences arising on the translation of foreign operations are included in currency translation reserves within equity. These are transferred to the income statement when the Group disposes of the entire interest in a foreign operation, when partial disposal results in the loss of control of an interest in a subsidiary, when an investment previously accounted for using the equity method is accounted for as a financial asset, or on the disposal of a foreign operation within a branch. (iii) Financial assets and liabilities Recognition The Group recognises financial assets and liabilities when it becomes a party to the terms of the contract. Trade date or settlement date accounting is applied depending on the classification of the financial asset. Classification and measurement Financial assets are classified on the basis of two criteria: i) the business model within which financial assets are managed, and ii) their contractual cash flow characteristics (whether the cash flows represent ‘solely payments of principal and interest’ (SPPI)). The Group assesses the business model criteria at a portfolio level. Information that is considered in determining the applicable business model includes (i) policies and objectives for the relevant portfolio, (ii) how the performance and risks of the portfolio are managed, evaluated and reported to management, and (iii) the frequency, volume and timing of sales in prior periods, sales expectation for future periods, and the reasons for such sales. The contractual cash flow characteristics of financial assets are assessed with reference to whether the cash flows represent SPPI. Terms that could change the contractual cash flows so that it would not meet the condition for SPPI are considered, including: (i) contingent and leverage features, (ii) non-recourse arrangements, (iii) features that could modify the time value of money, and (iv) Social, Environmental and Sustainability-linked features. Terms with de minimis impact do not preclude cash flows from representing SPPI. The accounting policy for each type of financial asset or liability is included within the relevant note for the item. The Group’s policies for determining the fair values of the assets and liabilities are set out in Note 17. Derecognition The Group derecognises a financial asset, or a portion of a financial asset, from its balance sheet where (i) the contractual rights to cash flows from the asset have expired, or (ii) the contractual rights to cash flows from the asset have been transferred (usually by sale) and with them either (a) substantially all the risks and rewards of the asset have been transferred, or (b) where neither substantially all the risks and reward have been transferred or retained, where control over the asset has been lost. Financial liabilities are derecognised when the liability has been settled, has expired or has been extinguished. An exchange of an existing financial liability for a new liability with the same lender on substantially different terms – generally a difference of 10% or more in the present value of the cash flows or a substantive qualitative amendment – is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. It may not be obvious whether substantially all of the risks and rewards of a transferred asset, or portion of an asset, have been transferred. It is often necessary to perform a quantitative analysis that compares the Group's exposure to variability in asset cash flows before the transfer with its retained exposure after the transfer. A cash flow analysis of this nature may require judgement. In particular, it is necessary to estimate the asset’s expected future cash flows as well as potential variability around this expectation. The method of estimating expected future cash flows depends on the nature of the asset, with market and market-implied data used to the greatest extent possible. The potential variability around this expectation is typically determined by stressing underlying parameters to create reasonable alternative upside and downside scenarios. Probabilities are then assigned to each scenario. Stressed parameters may include default rates, loss severity, or prepayment rates. Accounting for reverse repurchase and repurchase agreements including other similar lending and borrowing Reverse repurchase agreements (and stock borrowing or similar transactions) are a form of secured lending whereby the Group provides a loan or cash collateral in exchange for the transfer of collateral, generally in the form of marketable securities subject to an agreement to transfer the securities back at a fixed price in the future. Repurchase agreements are where the Group obtains such loans or cash collateral, in exchange for the transfer of collateral. The Group purchases (a reverse repurchase agreement) or borrows securities subject to a commitment to resell or return them. The securities are not included in the balance sheet as the Group does not acquire the risks and rewards of ownership. Consideration paid (or cash collateral provided) is accounted for as a loan asset at amortised cost, unless it is designated or mandatorily at fair value through profit and loss. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 423 Notes to the financial statements (continued) For the year ended 31 December 2023 The Group may also sell (a repurchase agreement) or lend securities subject to a commitment to repurchase or redeem them. The securities are retained on the balance sheet as the Group retains substantially all the risks and rewards of ownership. Consideration received (or cash collateral provided) is accounted for as a financial liability at amortised cost, unless it is designated at fair value through profit and loss. (iv) Issued debt and equity instruments Issued financial instruments or their components are classified as liabilities if the contractual arrangement results in the Group having an obligation to either deliver cash or another financial asset, or a variable number of equity shares, to the holder of the instrument. If this is not the case, the instrument is generally an equity instrument and the proceeds included in equity, net of transaction costs. Dividends and other returns to equity holders are recognised when paid or declared by the members at the Annual General Meeting and treated as a deduction from equity. Where issued financial instruments contain both liability and equity components, these are accounted for separately. The fair value of the debt is estimated first and the balance of the proceeds is included within equity. (v) Cash flow statement Cash comprises cash on hand and balances at central banks. Cash equivalents comprise loans and advances to banks, cash collateral balances with central banks related to payment schemes and treasury and other eligible bills, all with original maturities of three months or less. Investments in debt securities at amortised cost, presented within loans and advances on the balance sheet, are deemed to be investing activities for the purposes of the cash flow statement, except those instruments considered to be cash equivalents.  Debt securities issued and redeemed are considered to be operating activities, except qualifying eligible liabilities that satisfy regulatory requirements for MREL instruments (or have previously satisfied these requirements since 2019 when they came into effect), which are considered to be financing activities. 5. New and amended standards and interpretations The accounting policies adopted have been consistently applied, with the exception of the following: International Tax Reform—Pillar Two Model Rules (Amendments to IAS 12) On 23 May 2023, the IASB issued amendments to IAS 12 to provide a mandatory temporary exemption to the requirements to account for deferred taxes assets and liabilities related to Pillar Two income taxes, as published by the Organisation for Economic Co-operation and Development (OECD). The amendments are effective for accounting periods beginning on or after 1 January 2023 and the mandatory temporary exemption is applied retrospectively to prior periods. Disclosures related to the amendments are made in Note 9 on page 434. Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2) The amendments require entities to disclose their material rather than their significant accounting policies. The Group adopted the amendments effective 1 January 2023. Whilst these amendments do not change the Group’s accounting policies, the Group has reviewed the accounting policy information disclosed in these financial statements against the new requirements. Under the amendments, accounting policy information is material if, when considered together with other information included in an entity’s financial statements, it can reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements. Definition of an Accounting Estimate (Amendments to IAS 8) Under the new definition, accounting estimates are clarified as monetary amounts in financial statements that are subject to measurement uncertainty. Where an entity's accounting policy requires an item to be measured at monetary amounts that cannot be observed directly, it should develop an accounting estimate to achieve this objective. The amendments are effective 1 January 2023 and were adopted on this date. IFRS 17 – Insurance contracts In May 2017, the IASB issued IFRS 17 Insurance Contracts, a comprehensive new accounting standard for insurance contracts covering recognition and measurement, presentation and disclosure. IFRS 17 has replaced IFRS 4 Insurance Contracts that was issued in 2005. In June 2020, the IASB published amendments to IFRS 17, to include scope exclusion for certain credit card contracts and similar contracts that provide insurance coverage, the optional scope exclusion for loan contracts that transfer significant insurance risk, and the clarification that only financial guarantees issued are in scope of IFRS 9. IFRS 17 applies to all types of insurance contracts (i.e. life, non-life, direct insurance and reinsurance), regardless of the type of entities that issue them, as well as to certain guarantees and financial instruments with discretionary participation features. A few scope exceptions apply. IFRS 17 was effective for accounting periods beginning on or after 1 January 2023 but the impact to the Group is not material. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 424 Notes to the financial statements (continued) For the year ended 31 December 2023 Future accounting developments The following accounting standards have been issued by the IASB but are not yet effective: Classification of Liabilities as Current or Non-current (Amendments to IAS 1) In January 2020 the IASB issued amendments to IAS 1 to clarify the presentation of liabilities in the balance sheet, with an effective date of 1 January 2024. The amendments clarify that a liability should be classified as non-current only if the entity has the right to defer settlement of the liability for at least 12 months after the reporting period, and that (i) the right to defer settlement must exist at the end of the reporting period and (ii) management’s intentions or expectations about whether it will exercise its right to defer settlement does not affect the classification. Further clarifications include how lending conditions affect classification and classification of liabilities the entity will or may settle by issuing its own equity instruments. In October 2022, the IASB also issued further amendments to IAS 1 to improve the information an entity provides when its right to defer settlement of a liability for at least 12 months is subject to compliance with covenants, and to respond to stakeholders’ concerns about the classification of such a liability as current or non-current. 6. Critical accounting estimates and judgements The preparation of financial statements in accordance with IFRS requires the use of estimates. It also requires management to exercise judgement in applying the accounting policies. The key areas involving a higher degree of judgement or complexity or areas where assumptions are significant to the consolidated and individual financial statements are highlighted under the relevant note. Critical accounting estimates and judgements are disclosed in: ▪ Credit impairment charges on page 431 ▪ Tax on page 435 ▪ Fair value of financial instruments on page 449 ▪ Goodwill and intangible assets on page 466 ▪ Pensions and post-retirement benefit obligations on page 485 ▪ Provisions including conduct and legal, competition and regulatory matters on page 468. 7. Other disclosures To improve transparency and ease of reference, by concentrating related information in one place, certain disclosures required under IFRS have been included within the Risk review section as follows: ▪ Credit risk on pages 276 to 277 and 291 to 335 ▪ Market risk on page 278 and 336 to 337 ▪ Treasury and Capital risk – liquidity on page 278 to 279 and 339 to 349 ▪ Treasury and Capital risk – capital on page 279 and 350 to 356. These disclosures are covered by the Audit opinion (included on pages 396 to 412) where referenced as audited. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 425 Notes to the financial statements (continued) For the year ended 31 December 2023 Financial performance and returns The notes included in this section focus on the results and performance of the Group. Information on the income generated, expenditure incurred, segmental performance, tax, earnings per share and dividends are included here. For further detail on performance, see income statement commentary within Financial Review (unaudited). 2 Segmental reporting Presentation of segmental reporting Operating segments are reported in a manner consistent with the internal reporting provided to the Executive Committee, which is responsible for allocating resources and assessing performance of the operating segments, and has been identified as the chief operating decision maker. All transactions between business segments are conducted on an arm’s-length basis, with intra-segment revenue and costs being eliminated in Head Office. Income and expenses directly associated with each segment are included in determining business segment performance. The Group is a British universal bank diversified by business, geography and income type, serving consumer and wholesale customers and clients globally and for segmental reporting purposes it defines its two operating divisions as Barclays UK and Barclays International. ▪ Barclays UK consists of our UK Personal Banking, UK Business Banking and Barclaycard Consumer UK businesses. These businesses are carried on by our UK ring-fenced bank (Barclays Bank UK PLC) and certain other entities within the Group. ▪ Barclays International consists of our Corporate and Investment Bank and Consumer, Cards and Payments businesses. These businesses are carried on by our non ring-fenced bank (Barclays Bank PLC) and its subsidiaries, and certain other entities within the Group. The below table also includes Head Office which comprises head office and legacy businesses, as well as the FTEs employed by Barclays Execution Services. Analysis of results by business For the year ended 31 December 2023 Total income Operating costs UK bank levy Litigation and conduct Total operating expenses 1 Other net income/(expenses) Profit/(loss) before impairment Credit impairment charges Profit/(loss) before tax Total assets (£bn) Total liabilities (£bn) Number of employees (full time equivalent) Average number of employees (full time equivalent) Average number of employees (headcount) Note Barclays UK Barclays International Head Office Group results £m £m £m £m 7,587 (4,393) (30) 8 17,918 (11,578) (136) (47) (4,415) (11,761) — 3,172 (304) 2,868 293.1 264.2 6,800 (2) 6,155 (1,548) 4,607 1,166.1 1,077.9 12,400 (127) (743) (14) 2 (755) (7) (889) (29) (918) 18.3 63.5 73,200 25,378 (16,714) (180) (37) (16,931) (9) 8,438 (1,881) 6,557 1,477.5 1,405.6 92,400 92,900 94,800 1 Other net income/(expenses) represents the share of post-tax results of associates and joint ventures, profit on disposal of subsidiaries, associates and joint ventures, and gains on acquisitions. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 426 Notes to the financial statements (continued) For the year ended 31 December 2023 For the year ended 31 December 2022 Total income Operating costs UK bank levy Litigation and conduct Total operating expenses 1 Other net income/(expenses) Profit/(loss) before impairment Credit impairment charges Profit/(loss) before tax Total assets (£bn) Total liabilities (£bn) Number of employees (full time equivalent) Average number of employees (full time equivalent) Average number of employees (headcount) Note Barclays UK Barclays International Head Office Group results £m £m £m £m 7,259 (4,260) (26) (41) (4,327) — 2,932 (286) 2,646 313.2 287.3 6,200 17,867 (10,361) (133) (1,503) (11,997) 28 5,898 (933) 4,965 1,181.3 1,093.9 10,900 (170) (336) (17) (53) (406) (22) (598) (1) (599) 19.2 63.2 70,300 24,956 (14,957) (176) (1,597) (16,730) 6 8,232 (1,220) 7,012 1,513.7 1,444.4 87,400 83,900 86,200 1 Other net income represents the share of post-tax results of associates and joint ventures, profit on disposal of subsidiaries, associates and joint ventures, and gains on acquisitions. For the year ended 31 December 2021 Total income Operating costs UK bank levy Litigation and conduct Total operating expenses 1 Other net income Profit/(loss) before impairment Credit impairment releases Profit/(loss) before tax Total assets (£bn) Total liabilities (£bn) Number of employees (full time equivalent)2 Average number of employees (full time equivalent) Average number of employees (headcount) Notes Barclays UK Barclays International £m £m 6,536 (4,357) (36) (37) (4,430) — 2,106 365 2,471 321.2 291.8 7,100 15,665 (9,076) (134) (345) (9,555) 40 6,150 288 6,438 1,044.1 965.4 10,400 Head Office £m (261) (659) — (15) (674) 220 (715) — (715) 19.0 57.0 64,100 Group results £m 21,940 (14,092) (170) (397) (14,659) 260 7,541 653 8,194 1,384.3 1,314.2 81,600 82,900 85,600 1 Other net income/(expenses) represents the share of post-tax results of associates and joint ventures, profit (or loss) on disposal of subsidiaries, associates and joint ventures, and gains on acquisitions. 2 Barclays Execution Services Employees are reported within the Head Office Segment. Barclays UK transformed its business in 2021 and consolidated all Customer Care employees, who directly serve customers, into Barclays Execution Services to improve customer service and experience. Costs are recharged, while FTEs are reported within Head Office, as at 31 December 2021 10,700 FTEs were impacted by the move from Barclays UK to Head Office. Barclays PLC has announced on 20 February 2024 changes to the way that the business is being managed and it has published comparative financial information to reflect these changes to its segmental reporting which are effective from January 2024. From Q124, the Group will present its financial disclosures through the following new segments: • Barclays UK • Barclays UK Corporate Bank • Barclays Private Bank and Wealth Management • Barclays Investment Bank • Barclays US Consumer Bank The previously reported Head office will additionally include the held for sale German consumer finance business and the merchant acquiring component on the Payments business both previously reported within Barclays International as part of CC&P. Considering the revised segmentation in January 2024, our assessment has not led to any further financial impacts. These changes do not affect legal entities nor do they impact the Group’s previously reported consolidated financials. A copy of the resegmentation document is available at home.barclays/investor-relations/reports-and-events/financial-results/ Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 427 Notes to the financial statements (continued) For the year ended 31 December 2023 Income by geographic region1 For the year ended 31 December United Kingdom Europe Americas Africa and Middle East Asia Total .Income from individual countries which represent more than 5% of total income1 For the year ended 31 December United Kingdom United States Note 1 The geographical analysis is based on the location of the office where the transactions are recorded. 3 Net interest income Accounting for interest income and expenses 2023 £m 13,295 2,517 8,109 87 1,370 25,378 2023 £m 13,295 7,911 2022 £m 14,908 2,321 6,353 63 1,311 24,956 2022 £m 14,908 6,176 2021 £m 11,256 2,372 7,199 45 1,068 21,940 2021 £m 11,256 7,048 Interest income on loans and advances at amortised cost and financial assets at fair value through other comprehensive income, and interest expense on financial liabilities held at amortised cost, are calculated using the effective interest method which allocates interest, and direct and incremental fees and costs, over the expected lives of the assets and liabilities. The effective interest method requires the Group to estimate future cash flows, in some cases based on its experience of customers’ behaviour, considering all contractual terms of the financial instrument, as well as the expected lives of the assets and liabilities. The Group incurs certain costs to originate credit card balances with the most significant being co-brand partner fees. To the extent these costs are attributed to customers that continuously carry an outstanding balance (revolvers) and incremental to the origination of credit card balances, they are capitalised and subsequently included within the calculation of the effective interest rate. They are amortised to interest income over the period of expected repayment of the originated balance. Costs attributed to customers that settle their outstanding balances each period (transactors) are deferred on the balance sheet as a cost of obtaining a contract and amortised to fee and commission expense over the life of the customer relationship (refer to Note 4). There are no other individual estimates involved in the calculation of effective interest rates that are material to the results or financial position. Cash and balances at central banks Debt securities at amortised cost Loans and advances at amortised cost Fair value through other comprehensive income Negative interest on liabilities 1 Other Interest and similar income Deposits at amortised cost Debt securities in issue Subordinated liabilities Negative interest on assets 2 Other Interest and similar expense Net interest income Notes 2023 £m 10,262 2,337 14,742 4,907 46 2,781 35,075 (11,252) (6,344) (866) (7) (3,897) (22,366) 12,709 2022 £m 2,916 1,251 12,125 1,963 208 633 19,096 (3,573) (3,240) (530) (208) (973) (8,524) 10,572 2021 £m 184 177 9,363 550 248 718 11,240 (561) (1,340) (507) (374) (385) (3,167) 8,073 1 Other interest and similar income includes interest income from cash collaterals and reverse repurchase agreements and other similar secured lending at amortised cost. 2 Other interest and similar expense includes interest expense from cash collaterals and repurchase agreements and other similar secured borrowing at amortised cost. Interest and similar income presented above represents interest revenue calculated using the effective interest method. Costs to originate credit card balances of £935m (2022: £786m; 2021: £652m) have been amortised to interest and similar income during the year. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 428 Notes to the financial statements (continued) For the year ended 31 December 2023 4 Net fee and commission income Accounting for net fee and commission income The Group recognises fee and commission income charged for services provided by the Group as and when performance obligations are satisfied, for example, on completion of the underlying transaction. Incremental costs are reported within fee and commission expense if they are directly attributable to generating identifiable fee and commission income. Where the contractual arrangements also result in the Group recognising financial instruments in scope of IFRS 9, such financial instruments are initially recognised at fair value in accordance with IFRS 9 before applying the provisions of IFRS 15. Fee and commission income is disaggregated below by fee types that reflect the nature of the services offered across the Group and operating segments, in accordance with IFRS 15. The below table includes a total for fees in scope of IFRS 15. Refer to Note 2 for more detailed information about operating segments. Fee type Transactional Advisory Brokerage and execution Underwriting and syndication Other Total revenue from contracts with customers Other non-contract fee income Fee and commission income Fee and commission expense Net fee and commission income Fee type Transactional Advisory Brokerage and execution Underwriting and syndication Other Total revenue from contracts with customers Other non-contract fee income Fee and commission income Fee and commission expense Net fee and commission income Fee type Transactional Advisory Brokerage and execution Underwriting and syndication Other Total revenue from contracts with customers Other non-contract fee income Fee and commission income Fee and commission expense Net fee and commission income Barclays UK 2023 Barclays International Head Office £m £m 1,124 52 234 33 36 1,479 — 1,479 (368) 1,111 3,692 903 1,763 2,080 62 8,500 139 8,639 (3,217) 5,422 £m — — — — 3 3 — 3 (7) (4) Barclays UK 2022 Barclays International Head Office £m £m £m 1,084 161 256 — 59 1,560 — 1,560 (319) 1,241 3,256 964 1,521 2,037 153 7,931 143 8,074 (2,713) 5,361 — — — — 3 3 — 3 (6) (3) 2021 Barclays International Head Office Barclays UK £m £m £m 871 172 228 — 74 1,345 — 1,345 (218) 1,127 2,572 1,096 1,135 3,425 182 8,410 121 8,531 (1,983) 6,548 — 1 — — 3 4 — 4 (5) (1) Total £m 4,816 955 1,997 2,113 101 9,982 139 10,121 (3,592) 6,529 Total £m 4,340 1,125 1,777 2,037 215 9,494 143 9,637 (3,038) 6,599 Total £m 3,443 1,269 1,363 3,425 259 9,759 121 9,880 (2,206) 7,674 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 429 Notes to the financial statements (continued) For the year ended 31 December 2023 Fee types Transactional Transactional fees are service charges on deposit accounts, cash management services fees and transactional processing fees. These include interchange and merchant fee income generated from credit and bank card usage. Transaction and processing fees are recognised at the point in time the transaction occurs or service is performed. Interchange and merchant fees are recognised upon settlement of the card transaction payment. The Group incurs certain card-related costs including those related to cardholder reward programmes and payments to co-brand partners. Cardholder reward programme costs related to customers that settle their outstanding balance each period (transactors) are expensed when incurred and presented in fee and commission expense, while costs related to customers that continuously carry an outstanding balance (revolvers) are included in the effective interest rate of the receivable (refer to Note 3). Payments to partners for new cardholder account originations related to transactor accounts are deferred as costs to obtain a contract under IFRS 15, while costs related to revolver accounts are included in the effective interest rate of the receivable (refer to Note 3). Those costs deferred under IFRS 15 are capitalised and amortised over the estimated life of the customer relationship. Payments to co-brand partners based on revenue sharing to the extent the revenue share relates to "revolvers" are included in the effective interest rate of the receivable and to the extent revenue share relates to “transactors” it must be presented in fee and commission expense. Payments based on profitability are presented in fee and commission expense. Advisory Advisory fees are generated from wealth management services and investment banking advisory services related to mergers, acquisitions and financial restructurings. Wealth management advisory fees are earned over the period the services are provided and are generally recognised quarterly when the market value of client assets is determined. Investment banking advisory fees are recognised at the point in time when the services related to the transaction have been completed under the terms of the engagement. Investment banking advisory costs are recognised as incurred in fee and commission expense if direct and incremental to the advisory services or are otherwise recognised in operating expenses. Brokerage and execution Brokerage and execution fees are earned for executing client transactions with various exchanges and over-the-counter markets and assisting clients in clearing transactions and facilitating foreign exchange transactions for spot/forward contracts. Brokerage and execution fees are recognised at the point in time the associated service has been completed which is generally the trade date of the transaction. Underwriting and syndication Underwriting and syndication fees are earned for the distribution of client equity or debt securities and the arrangement and administration of a loan syndication. This includes commitment fees to provide loan financing. Underwriting fees are generally recognised on trade date if there is no remaining contingency, such as the transaction being conditional on the closing of an acquisition or another transaction. Underwriting costs are deferred and recognised in fee and commission expense when the associated underwriting fees are recorded. Syndication fees are earned for arranging and administering a loan syndication; however, the associated fee may be subject to variability until the loan has been syndicated to other syndicate members or until other contingencies have been resolved and therefore the fee revenue is deferred until the uncertainty is resolved. Included in the underwriting and syndication fees are loan commitment fees, when the drawdown is not probable. Such commitment fees are recognised over time through to the contractual maturity of the commitment. Contract assets and contract liabilities The Group had no material contract assets or contract liabilities as at 31 December 2023 (2022: £nil; 2021: £nil). Impairment of fee receivables and contract assets During 2023, there have been no material impairments recognised in relation to fees receivable and contract assets (2022: £nil; 2021: £nil). Fees in relation to transactional business can be added to outstanding customer balances. These amounts may be subsequently impaired as part of the overall loans and advances balance. Remaining performance obligations The Group applies the practical expedient of IFRS 15 and does not disclose information about remaining performance obligations that have original expected durations of one year or less or because the Group has a right to consideration that corresponds directly with the value of the service provided to the client or customer. Costs incurred in obtaining or fulfilling a contract The Group expects that incremental costs of obtaining a contract such as success fee and commission fees paid are recoverable and therefore capitalise such contract costs. Capitalised contract costs net of amortisation as at 31 December 2023 are £217m (2022: £198m; 2021: £154m). Capitalised contract costs are amortised over the customer relationship period depending on the transfer of services to which the asset pertains. In 2023, the amount of amortisation was £55m (2022: £47m; 2021: £36m) and there was no impairment loss recognised in connection with the capitalised contract costs (2022: £nil; 2021: £nil). Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 430 Notes to the financial statements (continued) For the year ended 31 December 2023 5 Net trading income Accounting for net trading income Trading positions are held at fair value, and the resulting gains and losses are included in net trading income, together with interest and dividends arising from long and short positions and funding costs relating to trading activities. Incremental costs are reported within net trading income if they are directly attributable to generating identifiable trading income. Income arises from both the sale and purchase of trading positions, margins which are achieved through market-making and customer business and from changes in fair value caused by movements in interest and exchange rates, equity prices and other market variables. Gains or losses on non-trading financial instruments designated or mandatorily at fair value with changes in fair value recognised in the income statement are included in net trading income. Net gains on financial instruments held for trading Net gains on financial instruments designated at fair value Net gains on financial instruments mandatorily at fair value Net trading income 6 Net investment income/(expense) Accounting for net investment income/(expense) 2023 £m 4,257 380 1,308 5,945 2022 £m 6,021 508 1,520 8,049 2021 £m 3,992 692 1,110 5,794 Dividends are recognised when the right to receive the dividend has been established. Incremental costs are reported within net investment income if they are directly attributable to generating identifiable investment income. Other accounting policies relating to net investment income are set out in Note 13 and Note 15. Net gains/(losses) from financial instruments mandatorily at fair value Net gains/(losses) from disposal of debt instruments at fair value through other comprehensive income Net (losses)/gains from disposal of financial assets and liabilities measured at amortised cost Dividend income 1 Net losses on other investments Net investment income/(expense) Note 2023 £m 171 26 (17) — (119) 61 2022 £m (51) (111) (18) 31 (285) (434) 2021 £m 73 305 114 20 (201) 311 1 Included within the 2022 balance are losses of £74m on sale arising from disposal of Barclays’ equity stake in Absa Group Limited (Absa) in April 2022 and September 2022. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 431 Notes to the financial statements (continued) For the year ended 31 December 2023 7 Operating expenses Infrastructure costs 1 Property and equipment Depreciation and amortisation 1 Impairment of property, equipment and intangible assets Total infrastructure costs Administration and general expenses Consultancy, legal and professional fees Marketing and advertising UK bank levy Other administration and general expenses Total administration and general expenses Staff costs1 Litigation and conduct2 Operating expenses Notes 2023 £m 1,948 1,784 363 4,095 782 585 180 1,235 2,782 10,017 37 16,931 2022 £m 1,649 1,723 63 3,435 669 500 176 1,101 2,446 9,252 1,597 16,730 2021 £m 1,538 1,673 403 3,614 610 399 170 958 2,137 8,511 397 14,659 1 Infrastructure costs & Staff costs included £927m relating to structural cost actions taken in Q4 2023 and £266m taken as a part of real estate review in 2021. 2 Includes costs related to the Over-issuance of securities (2022: £966m, 2021: £220m). For further details on staff costs including accounting policies, refer to Note 30. 8 Credit impairment charges/(releases) Accounting for the impairment of financial assets Impairment The Group is required to recognise expected credit losses (ECLs) based on unbiased forward-looking information for all financial assets at amortised cost, lease receivables, debt financial assets at fair value through other comprehensive income, loan commitments and financial guarantee contracts. At the reporting date, an allowance (or provision for loan commitments and financial guarantees) is required for the 12 month (Stage 1) ECLs. If the credit risk has significantly increased since initial recognition (Stage 2), or if the financial instrument is credit impaired (Stage 3), an allowance (or provision) should be recognised for the lifetime ECLs. The measurement of ECL is calculated using three main components: (i) probability of default (PD) (ii) loss given default (LGD) and (iii) the exposure at default (EAD). The 12 month and lifetime ECLs are calculated by multiplying the respective PD, LGD and the EAD. The 12 month and lifetime PDs represent the PD occurring over the next 12 months and the remaining maturity of the instrument respectively. The EAD represents the expected balance at default, taking into account the repayment of principal and interest from the balance sheet date to the default event together with any expected drawdowns of committed facilities. The LGD represents expected losses on the EAD given the event of default, taking into account, among other attributes, the mitigating effect of collateral value at the time it is expected to be realised and the time value of money. Expected credit loss measurement is based on the ability of borrowers to make payments as they fall due. The Group also considers sector-specific risks and whether additional adjustments are required in the measurement of ECL. Credit risk may be impacted by climate considerations for certain sectors, such as oil and gas. Determining a significant increase in credit risk since initial recognition: The Group assesses when a significant increase in credit risk has occurred based on quantitative and qualitative assessments. The credit risk of an exposure is considered to have significantly increased when: i) Quantitative test The annualised lifetime PD has increased by more than an agreed threshold relative to the equivalent at origination. PD deterioration thresholds are defined as percentage increases, and are set at an origination score band and segment level to ensure the test appropriately captures significant increases in credit risk at all risk levels. Generally, thresholds are inversely correlated to the origination PD, i.e. as the origination PD increases, the threshold value reduces. The assessment of the point at which a PD increase is deemed ‘significant’, is based upon analysis of the portfolio’s risk profile against a common set of principles and performance metrics (consistent across both retail and wholesale businesses), incorporating expert credit judgement where appropriate. Application of quantitative PD floors does not represent the use of the low credit risk exemption as exposures can separately move into Stage 2 via the qualitative route described below. Wholesale assets apply a 100% increase in PD and 0.2% PD floor to determine a significant increase in credit risk. Retail assets apply bespoke relative increase and absolute PD thresholds based on product type and origination PD. Thresholds are subject to maximums defined by Group policy and typically apply minimum relative thresholds of 50-100% and a maximum relative threshold of 400%. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 432 Notes to the financial statements (continued) For the year ended 31 December 2023 For existing/historical exposures where origination point scores or data are no longer available or do not represent a comparable estimate of lifetime PD, a proxy origination score is defined, based upon: • back-population of the approved lifetime PD score either to origination date or, where this is not feasible, as far back as possible (subject to a data start point no later than 1 January 2015); or • use of available historical account performance data and other customer information, to derive a comparable ‘proxy’ estimation of origination PD. ii) Qualitative test This is relevant for accounts that meet the portfolio’s ‘high risk’ criteria and are subject to closer credit monitoring. High risk customers may not be in arrears but either through an event or an observed behaviour exhibit credit distress. The definition and assessment of high risk includes as wide a range of information as reasonably available, such as industry and Group-wide customer level data, including but not limited to bureau scores and high consumer indebtedness index, wherever possible or relevant. Whilst the high risk populations applied for IFRS 9 impairment purposes are aligned with risk management processes, they are also regularly reviewed and validated to ensure that they capture any incremental segments where there is evidence of credit deterioration. iii) Backstop criteria This is relevant for accounts that are more than 30 calendar days past due. The 30 days past due criteria is a backstop rather than a primary driver of moving exposures into Stage 2. The criteria for determining a significant increase in credit risk for assets with bullet repayments follows the same principle as all other assets, i.e. quantitative, qualitative and backstop tests are all applied. Exposures will move back to Stage 1 once they no longer meet the criteria for a significant increase in credit risk. This means that, at a minimum all payments must be up-to-date, the PD deterioration test is no longer met, the account is no longer classified as high risk, and the customer has evidenced an ability to maintain future payments. Exposures are only removed from Stage 3 and reassigned to Stage 2 once the original default trigger event no longer applies. Exposures being removed from Stage 3 must no longer qualify as credit impaired, and: a) the obligor will also have demonstrated consistently good payment behaviour over a 12-month period, by making all consecutive contractual payments due and, for forborne exposures, the relevant EBA defined probationary period has also been successfully completed or; b) (for non-forborne exposures) the performance conditions are defined and approved within an appropriately sanctioned restructure plan, including 12 months’ payment history have been met. Management overlays and other exceptions to model outputs are applied only if consistent with the objective of identifying significant increases in credit risk. Forward-looking information The measurement of ECL involves complexity and judgement, including estimation of PD, LGD, a range of unbiased future economic scenarios, estimation of expected lives (where contractual life is not appropriate), and estimation of EAD and assessing significant increases in credit risk. Credit losses are the expected cash shortfalls from what is contractually due over the expected life of the financial instrument, discounted at the original effective interest rate (EIR). ECLs are the unbiased probability-weighted credit losses determined by evaluating a range of possible outcomes and considering future economic conditions. Refer to the Measurement uncertainty and sensitivity analysis section on page 311 for further details. Definition of default, credit impaired assets, write-offs, and interest income recognition The definition of default for the purpose of determining ECLs, and for internal credit risk management purposes, has been aligned to the Regulatory Capital CRR Article 178 definition of default, to maintain a consistent approach with IFRS 9 and associated regulatory guidance. The Regulatory Capital CRR Article 178 definition of default considers indicators that the debtor is unlikely to pay, includes exposures in forbearance and is no later than when the exposure is more than 90 days past due. When exposures are identified as credit impaired at the time when they are purchased or originated, interest income is calculated on the carrying value net of the impairment allowance. An asset is considered credit impaired when one or more events occur that have a detrimental impact on the estimated future cash flows of the financial asset. This comprises assets defined as defaulted and other individually assessed exposures where imminent default or actual loss is identified. Uncollectable loans are written off against the related allowance for loan impairment on completion of the Group’s internal processes and when all reasonably expected recoverable amounts have been collected. Subsequent recoveries of amounts previously written off are credited to the income statement. The timing and extent of write-offs may involve some element of subjective judgement. Nevertheless, a write-off will often be prompted by a specific event, such as the inception of insolvency proceedings or other formal recovery action, which makes it possible to establish that some or the entire advance is beyond realistic prospect of recovery. Accounting for purchased financial guarantee contracts The Group may enter into a financial guarantee contract which requires the issuer of such contract to reimburse the Group for a loss it incurs because a specified debtor fails to make payment when due in accordance with the terms of a debt instrument. For these separate financial guarantee contracts, the Group recognises a reimbursement asset aligned with the recognition of the underlying Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 433 Notes to the financial statements (continued) For the year ended 31 December 2023 ECLs, if it is considered virtually certain that a reimbursement would be received if the specified debtor fails to make payment when due in accordance with the terms of the debt instrument. Loan modifications and renegotiations that are not credit-impaired When modification of a loan agreement occurs as a result of commercial restructuring activity rather than due to the credit risk of the borrower, an assessment must be performed to determine whether the terms of the new agreement are substantially different from the terms of the existing agreement. This assessment considers both the change in cash flows arising from the modified terms as well as the change in overall instrument risk profile. In respect of payment holidays granted to borrowers which are not due to forbearance, if the revised cash flows on a present value basis (based on the original EIR) are not substantially different from the original cash flows, the loan is not considered to be substantially modified.  Where terms are substantially different, the existing loan will be derecognised and a new loan will be recognised at fair value, with any difference in valuation recognised immediately within the income statement, subject to observability criteria. Where terms are not substantially different, the loan carrying value will be adjusted to reflect the present value of modified cash flows discounted at the original EIR, with any resulting gain or loss recognised immediately within the income statement as a modification gain or loss. Expected life Lifetime ECLs must be measured over the expected life. This is restricted to the maximum contractual life and takes into account expected prepayment, extension, call and similar options. The exceptions are certain revolving financial instruments, such as credit cards and bank overdrafts, that include both a drawn and an undrawn component where the entity’s contractual ability to demand repayment and cancel the undrawn commitment does not limit the entity’s exposure to credit losses to the contractual notice period. For revolving facilities, expected life is analytically derived to reflect the behavioural life of the asset, i.e. the full period over which the business expects to be exposed to credit risk. Behavioural life is typically based upon historical analysis of the average time to default, closure or withdrawal of facility. Where data is insufficient or analysis inconclusive, an additional ‘maturity factor’ may be incorporated to reflect the full estimated life of the exposures, based upon experienced judgement and/or peer analysis. Potential future modifications of contracts are not taken into account when determining the expected life or EAD until they occur. Discounting ECLs are discounted at the EIR at initial recognition or an approximation thereof and consistent with income recognition. For loan commitments the EIR is the rate that is expected to apply when the loan is drawn down and a financial asset is recognised. Issued financial guarantee contracts are discounted at the risk free rate. Lease receivables are discounted at the rate implicit in the lease. For variable/floating rate financial assets, the spot rate at the reporting date is used and projections of changes in the variable rate over the expected life are not made to estimate future interest cash flows or for discounting. Modelling techniques Currently, Internal Ratings- Based models are leveraged to calculate the point-in-time PD and LGD, which serve as key inputs to the IFRS 9 models. Thereafter, these inputs are extrapolated by the IFRS 9 models to create macroeconomic sensitive forecast of PDs, LGDs and in turn ECL. Forbearance A financial asset is subject to forbearance when it is modified due to the credit distress of the borrower. A modification made to the terms of an asset due to forbearance will typically be assessed as a non-substantial modification that does not result in derecognition of the original loan, except in circumstances where debt is exchanged for equity. Both performing and non-performing forbearance assets are classified as Stage 3 except where it is established that the concession granted has not resulted in diminished financial obligation and that no other regulatory definition of default criteria have been triggered, in which case the asset is classified as Stage 2. The minimum probationary period for non-performing forbearance is 12 months and for performing forbearance, 24 months. Hence, a minimum of 36 months is required for non-performing forbearance to move out of a forborne state. No financial instrument in forbearance can transfer back to Stage 1 until all of the Stage 2 thresholds are no longer met and can only move out of Stage 3 when no longer credit impaired. Critical accounting estimates and judgements IFRS 9 impairment involves several important areas of judgement, including estimating forward-looking modelled parameters (PD, LGD and EAD), developing a range of unbiased future economic scenarios, estimating expected lives and assessing significant increases in credit risk, based on the Group’s experience of managing credit risk. The determination of expected life is most material for Barclays' credit card portfolios which is obtained via behavioural life analysis to materially capture the risk of these facilities. Within the retail and small businesses portfolios, which comprise large numbers of small homogenous assets with similar risk characteristics where credit scoring techniques are generally used, the impairment allowance is calculated using forward-looking modelled parameters which are typically run at account level. There are many models in use, each tailored to a product, line of business or customer category. Judgement and knowledge is needed in selecting the statistical methods to use when the models are developed or revised. Management adjustments to impairment models, which contain an element of subjectivity, are applied in order to factor in certain conditions or changes in policy that are not fully incorporated into the impairment models, or to reflect additional facts and circumstances at the period end. Management adjustments are reviewed and incorporated into future model development where appropriate. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 434 Notes to the financial statements (continued) For the year ended 31 December 2023 For individually significant assets in Stage 3, impairment allowances are calculated on an individual basis and all relevant considerations that have a bearing on the expected future cash flows across a range of economic scenarios are taken into account. These considerations can be particularly subjective and can include the business prospects for the customer, the realisable value of collateral, the Group’s position relative to other claimants, the reliability of customer information and the likely cost and duration of the work-out process. The level of the impairment allowance is the difference between the value of the discounted expected future cash flows (discounted at the loan’s original effective interest rate), and its carrying amount. Furthermore, judgements change with time as new information becomes available or as work-out strategies evolve, resulting in frequent revisions to the impairment allowance as individual decisions are taken. Changes in these estimates would result in a change in the allowances and have a direct impact on the impairment charge. Further information on impairment allowances, impairment charges, management adjustments to models for impairment, measurement uncertainty, sensitivity analysis and related credit information is set out within the Credit risk performance section. Temporary adjustments to calculated IFRS9 impairment allowances may be applied in limited circumstances to account for situations where known or expected risk factors or information have not been considered in the ECL assessment or modelling process. For further information please see page 307 in the Credit risk performance section. Information about the potential impact of the physical and transition risks of climate change on borrowers is considered, taking into account reasonable and supportable information to make accounting judgements and estimates. Climate change is inherently of a long-term nature, with significant levels of uncertainty, and consequently requires judgement in determining the possible impact in the next financial year, if any. Impairment charges / (releases) £m 2,017 2023 2022 2021 Recoveries and reimbursements1 Total2 Impairment charges / (releases) Recoveries and reimbursements1 £m £m £m £m Impairment charges / (releases) Recoveries and reimbursements1 £m £m Total £m Total £m (73) 1,944 1,428 (263) 1,165 (361) 240 (121) (61) 1,956 4 (1) (5) — (61) (73) 1,883 — — — 4 (1) (5) 18 1,446 28 9 — — 18 (263) 1,183 (514) (875) — (514) 240 (635) — — 28 9 — (4) (8) (6) — — — (4) (8) (6) 1,954 (73) 1,881 1,483 (263) 1,220 (893) 240 (653) 3 Loans and advances at amortised cost Off-balance sheet loan commitments and financial guarantee contracts Total Cash collateral and settlement balances Financial instruments at fair value through other comprehensive income Other financial asset measured at cost Credit impairment charges /(releases) Notes 1 Recoveries and reimbursements includes £29m (2022: £199m, 2021: £(306)m) for reimbursements expected to be received under the arrangement where Group has entered into financial guarantee contracts which provide credit protection over certain assets with third parties and cash recoveries of previously written off amounts of £44m (2022: £64m, 2021: £66m). 2 Includes net impairment charges of £19m relating to the German consumer finance portfolio classified as assets held for sale during the year. 3 Includes Debt securities at amortised cost. Write-offs that can be subjected to enforcement activity The contractual amount outstanding on financial assets that were written off during the year and that can still be subjected to enforcement activity is £597m (2022: £949m). This is lower than the write-offs presented in the movement in gross exposures and impairment allowance table due to assets sold during the year post write-offs and post write-off recoveries. Modification of financial assets Financial assets of £2,690m (2022: £2,412m, 2021: £3,446m), with a loss allowance measured at an amount equal to lifetime ECL, were subject to non-substantial modification during the year, with a resulting loss of £4m (2022: £4m, 2021: £11m). The gross carrying amount of financial assets subject to non-substantial modification for which the loss allowance has changed to a 12 month ECL during the year amounts to £149m (2022: £1,077m, 2021: £419m). 9 Tax Accounting for income taxes The Group applies IAS 12 Income Taxes in accounting for taxes on income. Income tax payable on taxable profits (current tax) is recognised as an expense in the periods in which the profits arise. Withholding taxes are also treated as income taxes. Income tax recoverable on tax allowable losses is recognised as a current tax asset only to the extent that it is regarded as recoverable by offsetting against taxable profits arising in the current or prior periods. Current tax is measured using tax rates and tax laws that have been enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised. Deferred tax liabilities are recognised for all taxable temporary differences except for the initial recognition of goodwill. Deferred tax is not recognised where the temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss. Deferred tax is determined using tax rates and legislation enacted or substantively enacted by the balance sheet date which are expected to apply when the deferred tax asset is Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 435 Notes to the financial statements (continued) For the year ended 31 December 2023 realised or the deferred tax liability is settled. Deferred tax assets and liabilities are only offset when there is both a legal right to set-off and an intention to settle on a net basis. The Group considers an uncertain tax position to exist when it considers that ultimately, in the future, the amount of profit subject to tax may be greater than the amount initially reflected in the Group’s tax returns. The Group accounts for provisions in respect of uncertain tax positions in two different ways. A current tax provision is recognised when it is considered probable that the outcome of a review by a tax authority of an uncertain tax position will alter the amount of cash tax due to, or from, a tax authority in the future. From recognition, the current tax provision is then measured at the amount the Group ultimately expects to pay the tax authority to resolve the position. The accrual of interest and penalty amounts in respect of uncertain income tax positions is recognised as an expense within profit before tax. Deferred tax provisions are adjustments made to the carrying value of deferred tax assets in respect of uncertain tax positions. A deferred tax provision is recognised when it is considered probable that the outcome of a review by a tax authority of an uncertain tax position will result in a reduction in the carrying value of the deferred tax asset. From recognition of a provision, measurement of the underlying deferred tax asset is adjusted to take into account the expected impact of resolving the uncertain tax position on the loss or temporary difference giving rise to the deferred tax asset. The approach taken to measurement takes account of whether the uncertain tax position is a discrete position that will be reviewed by the tax authority in isolation from any other position, or one of a number of issues which are expected to be reviewed together concurrently and resolved simultaneously with a tax authority. The Group’s measurement of provisions is based upon its best estimate of the additional profit that will become subject to tax. For a discrete position, consideration is given only to the merits of that position. Where a number of issues are expected to be reviewed and resolved together, the Group will take into account not only the merits of its position in respect of each particular issue but also the overall level of provision relative to the aggregate of the uncertain tax positions across all the issues that are expected to be resolved at the same time. In addition, in assessing provision levels, it is assumed that tax authorities will review uncertain tax positions and that all facts will be fully and transparently disclosed. Critical accounting estimates and judgements There are two key areas of judgement that impact the reported tax position. Firstly, the level of provisioning for uncertain tax positions; and secondly, the recognition and measurement of deferred tax assets. The Group does not consider there to be a significant risk of a material adjustment to the carrying amount of current and deferred tax balances, including provisions for uncertain tax positions in the next financial year. The provisions for uncertain tax positions cover a diverse range of issues and reflect advice from external counsel where relevant. It should be noted that only a proportion of the total uncertain tax positions will be under audit at any point in time, and could therefore be subject to challenge by a tax authority over the next year. Deferred tax assets have been recognised based on business profit forecasts which included consideration for the current view of climate impacts. Details on the recognition of deferred tax assets are provided in this note. Current tax charge/(credit) Current year Adjustments in respect of prior years Deferred tax (credit)/charge Current year Adjustments in respect of prior years Tax charge 2023 £m 1,359 (181) 1,178 (95) 151 56 1,234 2022 £m 1,045 (444) 601 235 203 438 1,039 2021 £m 1,417 317 1,734 (352) (244) (596) 1,138 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 436 Notes to the financial statements (continued) For the year ended 31 December 2023 The table below shows the reconciliation between the actual tax charge and the tax charge that would result from applying the standard UK corporation tax rate to the Group’s profit before tax. Profit before tax Tax charge based on the applicable UK corporation tax rate of 23.5% (2022: 19%; 2021: 19% ) Impact of profits/losses earned in territories with different statutory rates to the UK (weighted average tax rate is 23.6% (2022: 21.4%; 2021: 22.4% )) Recurring items: Non-creditable taxes including withholding taxes Non-deductible expenses Impact of UK bank levy being non-deductible 1 and other items Banking surcharge Impact of Barclays Bank PLC's overseas branches being taxed both locally and in the UK Tax adjustments in respect of share-based payments Adjustments in respect of prior years Changes in recognition of deferred tax and effect of unrecognised tax losses Non-taxable gains and income Tax relief on holdings of inflation-linked government bonds Tax relief on payments made under AT1 instruments Non-recurring items: Remeasurement of UK deferred tax assets due to tax rate changes Non-deductible provisions for investigations and litigation Non-deductible provisions for UK customer redress Total tax charge 2023 £m 6,557 2023 % 2022 £m 7,012 2022 % 2021 £m 8,194 2021 % 1,541 23.5% 1,332 19.0% 1,557 19.0% 4 0.1% 167 2.4% 277 3.4% 130 65 42 31 14 4 (30) (58) (65) (214) (222) 2.0% 1.0% 0.6% 0.5% 0.2% 0.1% (0.5%) (0.9%) (1.0%) (3.3%) (3.4%) — — (8) 1,234 — — (0.1%) 18.8% 126 51 33 101 17 13 1.8% 0.7% 0.5% 1.4% 0.2% 0.2% (241) (3.4%) 134 80 32 83 25 (5) 73 1.6% 1.0% 0.4% 1.0% 0.3% (0.1%) 0.9% (146) (2.1%) (140) (1.7%) (135) (556) (172) 346 93 10 (1.9%) (7.9%) (2.4%) (198) (169) (149) (2.4%) (2.1%) (1.8%) 4.9% 1.3% 0.1% (462) (5.6%) — — — — 1,039 14.8% 1,138 13.9% Note 1 Banking surcharge includes the impact of the 4.25% UK banking surcharge rate on profits/losses and tax adjustments relating to UK banking entities. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 437 Notes to the financial statements (continued) For the year ended 31 December 2023 Factors influencing the effective tax rate As a result of the increase in the UK corporation tax rate from 19% to 25% from 1 April 2023, the applicable UK corporation tax rate for the year ended 31 December 2023 is 23.5%. In addition, the banking surcharge rate reduced from 8% to 3% from 1 April 2023 resulting in a total tax rate applicable to banks’ UK profits of 27.75% for the year ended 31 December 2023. The effective tax rate of 18.8% is lower than the applicable UK corporation tax rate of 23.5% primarily due to tax relief on payments made under AT1 instruments and tax relief on holdings of inflation-linked government bonds. These factors, which have each decreased the effective tax rate, are partially offset by non-creditable taxes including withholding taxes. Factors that may influence the effective tax rate in future periods The Group’s future tax charge will be sensitive to the geographic mix of profits earned, the tax rates in force and changes to the tax rules in the jurisdictions that the Group operates in. Tax law is, at times, complex, and it is the role of courts and tribunals to act as the final authority on the correct interpretation of tax law. In October 2023, a First-tier Tax Tribunal hearing took place between Barclays Bank PLC and HM Revenue & Customs in respect of the UK corporation tax treatment of an element of the finance costs associated with reserve capital instruments issued as part of the capital raising announced by Barclays in October 2008, which have since been redeemed. The maximum additional tax liability that could arise under the dispute is £215m and a provision of £106m is carried in respect of this uncertainty. The judgement is expected to be received in early 2024. The OECD and G20 Inclusive Framework on Base Erosion and Profit Shifting announced plans under the Pillar Two Framework to introduce a global minimum tax rate of 15% and the OECD issued model rules in 2021. Further OECD guidance has been released during 2022 and 2023 and the UK Government enacted legislation on 11 July 2023 to implement the global minimum tax rules and a UK domestic minimum tax. The UK’s Pillar Two rules apply for accounting periods beginning on or after 31 December 2023 and will apply in respect of profits for every jurisdiction where the Group operates. Additionally, the Group may be subject to Qualifying Domestic Minimum Top-up Taxes (QDMTTs) under the Pillar Two rules implemented in its operating jurisdictions. The application of QDMTT rules should not affect the overall impact of any additional taxes resulting from the Pillar Two regime on the Group’s tax charge, as any taxes paid under a local QDMTT would be expected to result in a reduction in any top-up tax being payable in the UK. The Group has adopted the International Tax Reform - Pillar Two Model Rules amendments to IAS 12, which were issued on 23 May 2023 and approved by the UK Endorsement Board on 19 July 2023, and has applied the exception set out in paragraph 4A in respect of recognising and disclosing information about deferred tax assets and liabilities related to Pillar Two income taxes. The Group has reviewed the published UK legislation alongside the OECD model rules and guidance and has performed an assessment of the expected impact of the new regime. Additional taxes resulting from the implementation of Pillar Two are expected to arise from 1 January 2024 in respect of a limited number of jurisdictions in which the Group operates, principally in the Isle of Man, Jersey, Guernsey, and Ireland, by virtue of their low statutory tax rates. However, these additional taxes are not expected to significantly increase the Group's future tax charge based on an estimated impact of c.£20m per annum, with actual future liabilities being dependent on levels of profits in particular jurisdictions. The Group will continue to review further guidance due to be released by the OECD and governments implementing this new tax regime to assess the potential impact. In the USA, the corporate alternative minimum tax on adjusted financial statements income introduced by the Inflation Reduction Act became effective on 1 January 2023. The Group will continue to review the regulations and guidance as they are issued. However, the Group’s tax liability was not increased as a result of the corporate alternative minimum tax in 2023 and it is not expected that it will materially increase the Group’s future effective tax rate. Tax in the consolidated statement of comprehensive income The tax relating to each component of other comprehensive income can be found in the consolidated statement of comprehensive income. Tax included directly in equity Tax included directly in equity comprises a £9m credit (2022: £1m) relating to share-based payments and deductible costs on issuing other equity instruments. Deferred tax assets and liabilities The deferred tax amounts on the balance sheet were as follows: UK Tax Group US Intermediate Holding Company Tax Group ('IHC Tax Group') Barclays Bank PLC's US Branch Tax Group Other (outside the UK and US tax groups) Deferred tax asset Deferred tax liability Net deferred tax 2023 £m 4,081 973 386 520 5,960 (22) 5,938 2022 £m 4,925 1,094 482 490 6,991 (16) 6,975 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 438 Notes to the financial statements (continued) For the year ended 31 December 2023 US deferred tax assets in the IHC and US Branch Tax Groups The deferred tax asset in the IHC Tax Group of £973m (2022: £1,094m) includes £35m (2022: £21m) relating to tax losses, with the balance relating to temporary differences. The deferred tax asset in Barclays Bank PLC’s US Branch Tax Group of £386m (2022: £482m) relates entirely to temporary differences. In relation to the IHC Tax Group, these temporary differences include £387m (2022: £434m) arising from New York State and City prior net operating loss conversion which can be carried forward and will expire in 2034. Business profit forecasts indicate that all of the New York State attributable amounts will be utilised prior to expiry and that £38m of the New York City attributable amounts previously recognised will not be utilised prior to expiry. Accordingly, in the current period the deferred tax asset recognised has been reduced by £38m. UK Tax Group deferred tax asset The deferred tax asset in the UK Tax Group of £4,081m (2022: £4,925m) includes £1,566m (2022: £1,535m) relating to tax losses, with the balance relating to temporary differences. There is no time limit on utilisation of UK tax losses and business profit forecasts indicate that these losses will be fully recovered. Other deferred tax assets (outside the UK and US tax groups) The deferred tax asset of £520m (2022: £490m) in other entities within the Group includes £147m (2022: £90m) relating to tax losses. These deferred tax assets relate to a number of different territories and their recognition is based on profit forecasts or local country law which indicate that it is probable that those deferred tax assets will be fully recovered. Of the deferred tax asset of £520m (2022: £490m), an amount of £20m (2022: £33m) relates to entities which have suffered a loss in either the current or prior year and for which the utilisation of the deferred tax is dependent on future taxable profits. This has been taken into account in reaching the above conclusion that these deferred tax assets will be fully recovered in the future. The table below shows movements on deferred tax assets and liabilities during the year. The amounts are different from those disclosed on the balance sheet and in the preceding table as they are presented before offsetting asset and liability balances where there is a legal right to set-off and an intention to settle on a net basis. Fixed asset timing differences Fair value through other comprehensive income Cash flow hedges Retirement benefit obligations Loan impairment allowance Own Credit Share-based payments and deferred compensation £m 1,296 (77) 1,219 £m 675 — 675 (63) (26) £m 2,875 — 2,875 — £m 40 (1,315) (1,275) £m 702 — 702 (26) (43) (78) (1,398) 327 £m — (190) (190) — 273 2 85 85 — 85 426 — 426 — £m 433 — 433 43 (14) (13) 449 449 — 449 414 — 414 14 — (31) 628 628 — 628 693 — 693 (3) (11) — 20 702 702 — 702 (616) (17) — (190) — (190) (190) 22 433 433 — 433 — 571 571 — 571 155 — 155 (6) 523 3 675 675 — 675 — 1,477 1,477 (2) (976) 38 — (1,014) 1,477 (976) 521 — 521 — 2,354 — 2,875 2,875 40 (1,674) (1,634) 357 5 (1,275) 40 — (1,315) 2,875 (1,275) — (3) 1,153 1,277 (124) 1,153 1,647 (42) 1,605 (458) — 72 1,219 1,296 (77) 1,219 Other temporary differences Tax losses carried forward £m £m Total £m 1,280 1,646 8,947 (390) 890 (46) — (1,972) 1,646 105 6,975 (56) — — (890) (41) (3) (91) 803 1,146 1,748 1,748 5,938 7,419 (343) — (1,481) 803 1,748 5,938 1,248 1,220 6,364 (66) 1,182 (400) — 108 890 1,280 (390) — (1,782) 1,220 426 — — 1,646 1,646 4,582 (438) 2,601 230 6,975 8,947 — (1,972) 890 1,646 6,975 Assets Liabilities As at 1 January 2023 Income statement Other comprehensive income and reserves Other movements Assets Liabilities As at 31 December 2023 Assets Liabilities As at 1 January 2022 Income statement Other comprehensive income and reserves Other movements Assets Liabilities As at 31 December 2022 Other movements include the impact of changes in foreign exchange rates as well as deferred tax amounts relating to acquisitions and disposals. The amount of deferred tax assets expected to be recovered after more than 12 months is £5,325m (2022: £8,155m). The amount of deferred tax liability expected to be settled after more than 12 months is £1,173m (2022: £1,864m). These amounts are before offsetting asset and liability balances where there is a legal right to set-off and an intention to settle on a net basis. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 439 Notes to the financial statements (continued) For the year ended 31 December 2023 Unrecognised deferred tax Tax losses and temporary differences Deferred tax assets have not been recognised in respect of gross deductible temporary differences of £527m (2022: £111m), unused tax credits of £381m (2022: £323m), and gross tax losses of £21,681m (2022: £22,537m). The tax losses include capital losses of £3,965m (2022: £3,935m). Of these tax losses, £79m (2022: £149m) expire within five years, £13m (2022: £401m) expire within six to ten years, £10,504m (2022: £10,393m) expire within eleven to twenty years and £11,085m (2022: £11,594m) can be carried forward indefinitely. Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profits and gains will be available against which they can be utilised. Group investments in subsidiaries, branches and associates Deferred tax is not recognised in respect of the value of the Group's investments in subsidiaries, branches and associates where the Group is able to control the timing of the reversal of the temporary differences and it is probable that such differences will not reverse in the foreseeable future. The aggregate amount of these temporary differences for which deferred tax liabilities have not been recognised was £873m (2022: £852m). 10 Earnings per share Profit attributable to ordinary equity holders of the parent Basic weighted average number of shares in issue Number of potential ordinary shares Diluted weighted average number of shares 2023 £m 4,274 2023 million 15,445 450 15,895 Earnings per ordinary share Basic earnings per share Diluted earnings per share 2023 p 27.7 2022 p 30.8 2021 p 36.5 2023 p 26.9 2022 p 29.8 The calculation of basic earnings per share is based on the profit attributable to equity holders of the parent and the basic weighted average number of shares excluding treasury shares held in employee benefit trusts or held for trading. When calculating the diluted earnings per share, the weighted average number of shares in issue is adjusted for the effects of all expected dilutive potential ordinary shares held in respect of Barclays PLC, totalling 450m (2022: 534m, 2021: 435m) shares. The number of share options outstanding, under schemes that were considered to be potentially dilutive was 750m (2022: 789m, 2021: 688m) in total. These options have strike prices ranging from £0.83 to £1.51. Of the total number of employee share options and share awards at 31 December 2023, 39m (2022: 27m, 2021: 5m) were anti-dilutive. The 888m decrease (2022: 652m decrease, 2021: 315m decrease) in the basic weighted average number of shares is primarily due to the impact of the share buy-back programmes completed each year. 11 Dividends on ordinary shares The Directors have approved a total dividend in respect of 2023 of 8.00p per ordinary share of 25p each. The full year dividend for 2023 of 5.30p per ordinary share will be paid on 3 April 2024 to shareholders on the Share Register on 1 March 2024. On 31 December 2023, there were 15,155m ordinary shares in issue. The financial statements for the year ended 31 December 2023 do not reflect this dividend, which will be accounted for in shareholders’ equity as an appropriation of retained profits in the year ending 31 December 2024. The Directors have confirmed their intention to initiate a share buyback of up to £1bn after the balance sheet date. The proposed share buyback is expected to commence in the first quarter of 2024. The financial statements for the year ended 31 December 2023 do not reflect the impact of the proposed share buyback, which will be accounted for as and when shares are repurchased by the Company. The 2023 financial statements include the 2023 interim dividend of £417m (2022: £364m, 2021: £339m); a full year dividend declared in relation to 2022 of £793m (2021: £664m, 2020: £173m ) and two share buyback programmes totalling £1,250m (2022: £1,500m, 2021: £1,200m). Dividends and share buybacks are funded out of distributable reserves. 2022 £m 2021 £m 5,023 6,205 2022 million 16,333 534 16,867 2021 million 16,985 435 17,420 2021 p 35.6 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 440 Notes to the financial statements (continued) Assets and liabilities held at fair value Assets and liabilities held at fair value The notes included in this section focus on assets and liabilities the Group holds and recognises at fair value. Detail regarding the Group’s approach to managing market risk can be found in the Market risk management section. 12 Trading portfolio Accounting for trading portfolio assets and liabilities All assets and liabilities held for trading purposes are held at fair value with gains and losses in the changes in fair value taken to the income statement in net trading income (Note 5). Debt securities and other eligible bills Equity securities Traded loans Commodities Trading portfolio assets/(liabilities) Trading portfolio assets Trading portfolio liabilities 2023 £m 75,498 86,353 12,653 101 174,605 2022 £m 55,475 65,031 13,198 109 133,813 2023 £m (40,547) (18,122) — — 2022 £m (39,531) (33,393) — — (58,669) (72,924) 13 Financial assets at fair value through the income statement Accounting for financial assets designated at fair value Financial assets, other than those held for trading, are classified in this category if they are so irrevocably designated at inception and the use of the designation removes or significantly reduces an accounting mismatch. Subsequent changes in fair value for these instruments are recognised in the income statement in net investment income, except if reporting it in trading income reduces an accounting mismatch. The details on how the fair value amounts are derived for financial assets at fair value are described in Note 17. Accounting for financial assets mandatorily at fair value Financial assets that are held for trading are recognised at fair value through profit or loss. In addition, financial assets are held at fair value through profit or loss if they do not contain contractual terms that give rise on specified dates to cash flows that are SPPI, or if the financial asset is not held in a business model that is either (i) a business model to collect the contractual cash flows or (ii) a business model that is achieved by both collecting contractual cash flows and selling. Loans and advances Debt securities Equity securities Reverse repurchase agreements and other similar secured lending Other financial assets Financial assets at fair value through the income statement Designated at fair value Mandatorily at fair value Total 2023 £m 3,082 130 — — — 3,212 2022 £m 3,658 205 — — 1 3,864 2023 £m 44,557 2,456 7,185 149,131 110 203,439 2022 £m 35,771 3,044 6,091 164,681 117 209,704 2023 £m 47,639 2,586 7,185 149,131 110 206,651 2022 £m 39,429 3,249 6,091 164,681 118 213,568 Credit risk of financial assets designated at fair value and related credit derivatives The following table shows the maximum exposure to credit risk, the changes in fair value attributable to changes in credit risk, and the cumulative changes in fair value since initial recognition for loans and advances. The table does not include debt securities designated at fair value as they have minimal exposure to credit risk due to limited gross exposure. Loans and advances designated at fair value, attributable to credit risk Value mitigated by related credit derivatives Maximum exposure as at 31 December Changes in fair value during the year ended Cumulative changes in fair value from inception 2023 £m 3,081 613 2022 £m 3,658 855 2023 £m 3 (5) 2022 £m 10 (1) 2023 £m (3) (5) 2022 £m (9) (1) Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 441 Notes to the financial statements (continued) Assets and liabilities held at fair value 14 Derivative financial instruments Accounting for derivatives Derivative instruments are contracts whose value is derived from one or more underlying financial instruments or indices defined in the contract. They include swaps, forward-rate agreements, futures, options and combinations of these instruments and primarily affect the Group’s net interest income, net trading income and derivative assets and liabilities. Notional amounts of the contracts are not recorded on the balance sheet. Derivatives are used to hedge interest rate, credit risk, inflation risk, exchange rate, commodity equity exposures, and exposures to certain indices such as house price indices and retail price indices related to non-trading positions. All derivative instruments are held at fair value through profit or loss, except for derivatives that are in a designated cash flow or net investment hedge accounting relationship. Derivatives are classified as assets when their fair value is positive or as liabilities when their fair value is negative. Hedge accounting The Group applies the requirements of IAS 39 Financial Instruments: Recognition and Measurement for hedge accounting purposes. The Group applies hedge accounting to represent the economic effects of its interest rate, currency and contractually-linked inflation risk management strategies. Where derivatives are held for risk management purposes, and when transactions meet the required criteria for documentation and hedge effectiveness, the Group applies fair value hedge accounting, cash flow hedge accounting, or hedging of a net investment in a foreign operation, as appropriate to the risks being hedged. Fair value hedge accounting Changes in fair value of derivatives that qualify and are designated as fair value hedges are recorded in the income statement, together with changes in the fair value of the hedged asset or liability that are attributable to the hedged risk. The fair value changes adjust the carrying value of the hedged asset or liability held at amortised cost. If hedge relationships no longer meet the criteria for hedge accounting, hedge accounting is discontinued. For fair value hedges of interest rate risk, the fair value adjustment to the hedged item is amortised to the income statement over the period to maturity of the previously designated hedge relationship using the effective interest method. If the hedged item is sold or repaid, the unamortised fair value adjustment is recognised immediately in the income statement. For items classified as fair value through other comprehensive income, the hedge accounting adjustment is included in other comprehensive income. Cash flow hedge accounting For qualifying cash flow hedges, the fair value gain or loss associated with the effective portion of the cash flow hedge is recognised initially in other comprehensive income, and then recycled to the income statement in the periods when the hedged item will affect profit or loss. Any ineffective portion of the gain or loss on the hedging instrument is recognised in the income statement immediately. When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the hedged item is ultimately recognised in the income statement. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was recognised in equity is immediately transferred to the income statement. Hedges of net investments The Group’s net investments in foreign operations, including monetary items accounted for as part of the net investment, are hedged for foreign currency risks using both derivatives and foreign currency borrowings. Hedges of net investments are accounted for similarly to cash flow hedges; the effective portion of the gain or loss on the hedging instrument is being recognised directly in other comprehensive income and the ineffective portion being recognised immediately in the income statement. The cumulative gain or loss recognised in other comprehensive income is recognised in the income statement on the disposal or partial disposal of the foreign operation, or other reductions in the Group’s investment in the operation. Total derivatives Notional contract amount £m 2023 Fair value Assets £m Total derivative assets/(liabilities) held for trading Total derivative assets/(liabilities) held for risk management Derivative assets/(liabilities) 64,993,491 254,643 299,576 2,193 65,293,067 256,836 2022 Notional contract amount £m Fair value Assets £m Liabilities £m 52,689,773 301,647 (288,573) 285,505 733 (1,047) 52,975,278 302,380 (289,620) Liabilities £m (249,458) (586) (250,044) Further information on netting arrangements of derivative financial instruments can be found within Note 18. The fair values and notional amounts of derivative instruments held for trading and held for risk management are set out in the following table: Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 442 Notes to the financial statements (continued) Assets and liabilities held at fair value Derivatives held for trading and held for risk management 2023 2022 Notional contract amount £m Fair value Assets £m Liabilities £m Notional contract amount £m Fair value Assets £m Liabilities £m Derivatives held for trading Foreign exchange derivatives OTC derivatives Derivatives cleared by central counterparty Exchange traded derivatives Foreign exchange derivatives Interest rate derivatives OTC derivatives Derivatives cleared by central counterparty Exchange traded derivatives Interest rate derivatives Credit derivatives OTC derivatives Derivatives cleared by central counterparty Credit derivatives Equity and stock index derivatives OTC derivatives Exchange traded derivatives Equity and stock index derivatives Commodity derivatives OTC derivatives Exchange traded derivatives Commodity derivatives Derivative assets/(liabilities) held for trading Total OTC derivatives Total derivatives cleared by central counterparty Total exchange traded derivatives Derivative assets/(liabilities) held for trading Derivatives held for risk management Derivatives designated as cash flow hedges OTC foreign exchange derivatives OTC interest rate derivatives Interest rate derivatives cleared by central counterparty Derivatives designated as cash flow hedges Derivatives designated as fair value hedges OTC interest rate derivatives Interest rate derivatives cleared by central counterparty Derivatives designated as fair value hedges Derivatives designated as hedges of net investments OTC foreign exchange derivatives Derivatives designated as hedges of net investments Derivative assets/(liabilities) held for risk management Total OTC derivatives Total derivatives cleared by central counterparty Derivative assets/(liabilities) held for risk management 6,536,257 86,987 186,672 17,899 529 2 6,740,828 87,518 19,671,577 27,662,853 6,800,161 104,618 1,989 2,824 54,134,591 109,431 587,472 860,878 1,448,350 448,780 2,017,045 2,465,825 4,734 199,163 203,897 64,993,491 27,248,820 28,710,403 9,034,268 4,936 2,726 7,662 17,792 30,379 48,171 44 1,817 1,861 254,643 214,377 5,244 35,022 64,993,491 254,643 26,661 195 130,961 157,817 8,697 129,318 138,015 3,744 3,744 299,576 39,297 260,279 1,904 — — 1,904 178 — 178 111 111 2,193 2,193 — 299,576 2,193 (82,711) (512) (2) (83,225) (92,467) (2,065) (2,895) (97,427) (6,005) (2,625) (8,630) (25,779) (32,549) (58,328) (4) (1,844) (1,848) (249,458) (206,966) (5,202) (37,290) (249,458) (8) — — (8) (533) — (533) (45) (45) (586) (586) — (586) 5,775,206 108,833 (103,439) 113,455 19,426 440 15 (473) (6) 5,908,087 109,288 (103,918) 14,924,915 21,927,570 5,654,126 129,920 (116,752) 2,319 2,257 (2,371) (2,167) 42,506,611 134,496 (121,290) 619,843 1,107,377 1,727,220 410,276 1,924,613 2,334,889 4,411 208,555 212,966 52,689,773 21,734,651 23,148,402 7,806,720 4,262 1,161 5,423 12,679 35,986 48,665 14 3,761 3,775 301,647 255,708 3,920 42,019 (4,731) (1,321) (6,052) (16,724) (36,774) (53,498) (51) (3,764) (3,815) (288,573) (241,697) (4,165) (42,711) 52,689,773 301,647 (288,573) 11,946 266 143,271 155,483 7,814 118,246 126,060 3,962 3,962 285,505 23,988 261,517 285,505 549 — — 549 83 — 83 101 101 733 733 — 733 (211) (1) — (212) (815) — (815) (20) (20) (1,047) (1,047) — (1,047) Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 443 Notes to the financial statements (continued) Assets and liabilities held at fair value Hedge accounting Hedge accounting is applied predominantly for the following risks: ▪ Interest rate risk – arises due to a mismatch between fixed interest rates and floating interest rates. Interest rate risk also includes exposure to inflation risk for certain types of investments. ▪ Currency risk – arises due to assets or liabilities being denominated in different currencies than the functional currency of the relevant entity. At a consolidated level, currency risk also arises when the functional currency of subsidiaries are different from the parent. ▪ Contractually linked inflation risk – arises from financial instruments within contractually specified inflation risk. The Group does not hedge inflation risk that arises from other activities. In order to hedge these risks, the Group uses the following hedging instruments: ▪ ▪ Currency derivatives to swap foreign currency exposures into the entity’s functional currency, and net investment exposure to local Interest rate derivatives to swap interest rate exposures into either fixed or variable rates. currency. ▪ Inflation derivatives to swap inflation exposure into either fixed or variable interest rates. In some cases, certain items which are economically hedged may be ineligible hedged items for the purposes of IAS 39, such as core deposits and equity. In these instances, a proxy hedging solution can be utilised whereby portfolios of floating rate assets are designated as eligible hedged items in cash flow hedges. In some hedging relationships, the Group designates risk components of hedged items as follows: ▪ Benchmark interest rate risk as a component of interest rate risk, such as the Risk Free Rate (RFR) component. ▪ ▪ Spot exchange rate risk for foreign currency financial assets or financial liabilities. ▪ Components of cash flows of hedged items, for example certain interest payments for part of the life of an instrument. Inflation risk as a contractually specified component of a debt instrument. Using the benchmark interest rate risk results in other risks, such as credit risk and liquidity risk, being excluded from the hedge accounting relationship. In respect of many of the Group’s hedge accounting relationships, the hedged item and hedging instrument change frequently due to the dynamic nature of the risk management and hedge accounting strategy. The Group applies hedge accounting to dynamic scenarios, predominantly in relation to interest rate risk, with a combination of hedged items in order for its financial statements to reflect as closely as possible the economic risk management undertaken. In some cases, if the hedge accounting objective changes, the relevant hedge accounting relationship is de-designated and is replaced with a different hedge accounting relationship. Changes in the GBP value of net investments due to foreign currency movements are captured in the currency translation reserve, resulting in a movement in CET1 capital. The Group mitigates this by matching the CET1 capital movements to the revaluation of the foreign currency RWA exposures. Net investment hedges are designated where necessary to reduce the exposure to movement in a particular exchange rate to within limits mandated by Risk. As far as possible, existing external currency liabilities are designated as the hedging instruments. The hedging instruments share the same risk exposures as the hedged items. Hedge effectiveness is determined with reference to quantitative tests, predominantly regression testing, but to the extent hedging instruments are exposed to different risks than the hedged items, this could result in hedge ineffectiveness or hedge accounting failures. Sources of ineffectiveness include the following: ▪ Mismatches between the contractual terms of the hedged item and hedging instrument, including basis differences. ▪ Changes in credit risk of the hedging instruments. ▪ If a hedging relationship becomes over-hedged, for example in hedges of net investments if the net asset value designated at the start of the period falls below the amount of the hedging instrument. ▪ Cash flow hedges using external swaps with non-zero fair values. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 444 Notes to the financial statements (continued) Assets and liabilities held at fair value Hedged items in fair value hedges Accumulated fair value adjustment included in carrying amount Hedged item statement of financial position classification and risk category Carrying amount £m Total £m Of which: Accumulated fair value adjustment on items no longer in a hedge relationship Change in fair value used as a basis to determine ineffectiveness Hedge ineffectiveness recognised in the income statements1 £m £m £m 2023 Assets Loans and advances at amortised cost - Interest rate risk - Inflation risk Debt securities classified at amortised cost - Interest rate risk - Inflation risk Financial assets at fair value through other comprehensive income - Interest rate risk - Inflation risk Total assets Liabilities Debt securities in issue - Interest rate risk Total liabilities Total hedged items 2022 Assets Loans and advances at amortised cost - Interest rate risk - Inflation risk Debt securities classified at amortised cost - Interest rate risk - Inflation risk Financial assets at fair value through other comprehensive income - Interest rate risk - Inflation risk Total assets Liabilities Debt securities in issue - Interest rate risk Total liabilities Total hedged items Note 3,543 450 2,390 8,119 42,420 5,237 62,159 (3,193) (1,867) 246 — (24) (836) (21) (57) 113 3 49 (30) (1,392) (202) (5,401) (667) (176) 1,244 (84) (2,788) 1,295 (64,734) (64,734) (2,575) 3,105 3,105 1,034 1,034 (2,296) (1,754) (1,462) (1,462) (167) 4,906 445 159 4,858 33,583 8,514 52,465 (3,474) (1,268) 243 (19) (1,304) (3,758) (261) (8,573) — (11) (1) (4,405) (111) (133) (1,693) (232) 14 (4,799) (804) (1,498) (11,945) (51,893) (51,893) 4,825 4,825 527 527 5,946 5,946 572 (3,748) (971) (5,999) 11 (5) 21 (26) 197 (10) 188 (24) (24) 164 44 2 (20) (16) 168 (9) 169 13 13 182 1 Hedge ineffectiveness is recognised in net interest income. For items classified as fair value through other comprehensive income, the hedge accounting adjustment is not included in the carrying amount, but rather adjusts other comprehensive income. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 445 Notes to the financial statements (continued) Assets and liabilities held at fair value The following table shows the fair value hedging instruments which are carried on the Group’s balance sheet: Carrying value Derivative assets Derivative liabilities Loan liabilities Nominal amount Change in fair value used as a basis to determine ineffectiveness Hedge type Risk category As at 31 December 2023 Fair value Interest rate risk Inflation risk Total As at 31 December 2022 Fair value Interest rate risk Inflation risk Total £m 2 176 178 — 83 83 £m (2) (531) (533) — (815) (815) £m — — — — — — £m 123,016 14,999 138,015 109,761 16,299 126,060 The following table profiles the expected notional values of current hedging instruments in future years: As at 31 December Fair value hedges of: 2023 £m 2024 £m 2025 £m 2026 £m 2027 £m 2028 £m £m 261 70 331 3,596 2,585 6,181 2029 and later £m Interest rate risk (outstanding notional amount) Inflation risk (outstanding notional amount) 123,016 107,339 14,999 14,671 94,291 14,433 75,792 12,140 61,853 52,346 47,646 9,520 7,627 7,115 There are 1,996 (2022: 1,796) interest rate risk fair value hedges with an average fixed rate of 1.64% (2022: 1.97%) across the relationships and 136 (2022: 94) inflation risk fair value hedges with an average rate of 0.85% (2022: 0.54%) across the relationships. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 446 Notes to the financial statements (continued) Assets and liabilities held at fair value Hedged items in cash flow hedges and hedges of net investments in foreign operations Description of hedge relationship and hedged risk 2023 Cash flow hedge of: Interest rate risk Loans and advances at amortised cost Cash and balances at Central Banks Foreign exchange risk Loans and advances at amortised cost Debt securities classified at amortised cost Inflation risk Debt securities classified at amortised cost Total cash flow hedge Hedge of net investment in foreign operations USD foreign operations EUR foreign operations Other foreign operations Total foreign operations 2022 Cash flow hedge of: Interest rate risk Loans and advances at amortised cost Cash and balances at Central Banks Foreign exchange risk Loans and advances at amortised cost Debt securities classified at amortised cost Inflation risk Debt securities classified at amortised cost Total cash flow hedge Hedge of net investment in foreign operations USD foreign operations EUR foreign operations Other foreign operations Total foreign operations Change in value of hedged item used as the basis for recognising ineffectiveness Balance in cash flow hedging reserve for continuing hedges Balance in currency translation reserve for continuing hedges Balances remaining in cash flow hedging reserve for which hedge accounting is no longer applied Balances remaining in currency translation reserve for which hedge accounting is no longer applied Hedging (gains) or losses recognised in other comprehensive income Hedge ineffectiveness recognised in the income statement1 £m £m £m £m £m £m £m (1,172) (1,371) (463) (1,088) 395 470 30 333 (313) (4,407) (181) 1,047 — — — — — — (595) (113) (118) (826) — — — — 1,421 33 119 1,573 4,059 4,389 3 483 362 9,296 1,240 265 34 1,539 2,990 3,467 (13) 601 142 7,187 — — — — — — — — 1,886 141 242 2,269 2,069 2,051 — — 21 4,141 — — — — 1,374 1,484 — — 16 2,874 — — — — — — — — — — — — 23 23 — — — — — — 23 23 (1,172) (1,371) (463) (1,088) (313) (4,407) (595) (113) (118) (826) 4,059 4,389 3 483 98 9,032 1,240 265 34 1,539 34 115 6 1 — 156 — — — — (42) (41) 2 — 33 (48) — — — — Note 1 Hedge ineffectiveness is recognised in net interest income. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 447 Notes to the financial statements (continued) Assets and liabilities held at fair value The following table shows the cash flow and net investment hedging instruments which are carried on the Group’s balance sheet: Carrying value Derivative assets Derivative liabilities Loan liabilities Nominal amount Change in fair value used as a basis to determine ineffectiveness Hedge type Risk category As at 31 December 2023 Cash flow Interest rate risk Foreign exchange risk Inflation risk Total Net investment Foreign exchange risk As at 31 December 2022 Cash flow Interest rate risk Foreign exchange risk c Inflation risk Total Net investment Foreign exchange risk £m — 1,904 — 1,904 111 — 549 — 549 101 £m — (8) — (8) (45) (1) (211) — (212) (20) £m — — — — (13,157) — — — — (12,824) £m 128,349 26,661 2,807 157,817 16,901 140,901 11,946 2,636 155,483 16,786 £m 2,692 1,558 313 4,563 826 (8,531) (484) (329) (9,344) (1,539) There are 50 (2022: 58) foreign exchange risk cash flow hedges with an average foreign exchange rate of 147.94 JPY:1 GBP (2022: 148.00 JPY:1 GBP) across the relationships and 8 (2022: nil) foreign exchange risk cash flow hedges with an average foreign exchange rate of 1.25 USD:1 GBP (2022: nil) across the relationships. The effect on the income statement and other comprehensive income of recycling amounts in respect of cash flow hedges and net investment hedges of foreign operations is set out in the following table: 2023 2022 Description of hedge relationship and hedged risk Cash flow hedge of interest rate risk Recycled to net interest income Cash flow hedge of foreign exchange risk Recycled to trading income Hedge of net investment in foreign operations Recycled to trading income Amount recycled from other comprehensive income due to hedged item affecting income statement £m (1,752) 1,327 — Amount recycled from other comprehensive income due to sale of investment, or cash flows no longer expected to occur Amount recycled from other comprehensive income due to hedged item affecting income statement Amount recycled from other comprehensive income due to sale of investment, or cash flows no longer expected to occur £m 2 — (6) £m £m (320) (6) — (13) — (58) A detailed reconciliation of the movements of the cash flow hedging reserve and the currency translation reserve is as follows: Balance on 1 January Currency translation movements Hedging gains/(losses) for the year Amounts reclassified in relation to cash flows affecting profit or loss Tax Balance on 31 December 2023 2022 Cash flow hedging reserve Currency translation reserve Cash flow hedging reserve Currency translation reserve £m (7,235) 40 4,407 423 (1,342) (3,707) £m 4,772 (1,942) 826 6 9 3,671 £m £m (853) (20) (9,032) 339 2,331 2,740 3,513 (1,539) 58 — (7,235) 4,772 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 448 Notes to the financial statements (continued) Assets and liabilities held at fair value 15 Financial assets at fair value through other comprehensive income Accounting for financial assets at fair value through other comprehensive income (FVOCI) Financial assets that are debt instruments held in a business model that is achieved by both collecting contractual cash flows and selling and that contain contractual terms that give rise on specified dates to cash flows that are SPPI are measured at FVOCI. They are subsequently remeasured at fair value and changes therein (except for those relating to impairment, interest income and foreign currency exchange gains and losses) are recognised in other comprehensive income until the assets are sold. Interest (calculated using the effective interest method) is recognised in the income statement in net interest income (Note 3). Upon disposal, the cumulative gain or loss recognised in other comprehensive income is included in net investment income (Note 6). In determining whether the business model is achieved by both collecting contractual cash flows and selling financial assets, it is determined that both collecting contractual cash flows and selling financial assets are integral to achieving the objective of the business model. The Group will consider past sales and expectations about future sales to establish if the business model is achieved. For equity securities that are not held for trading, the Group may make an irrevocable election on initial recognition to present subsequent changes in the fair value of the instrument in other comprehensive income (except for dividend income which is recognised in profit or loss). Debt securities and other eligible bills Equity securities Loans and advances Financial assets at fair value through other comprehensive income 16 Financial liabilities designated at fair value Accounting for liabilities designated at fair value through profit and loss 2023 £m 71,059 6 771 71,836 2022 £m 64,832 8 222 65,062 In accordance with IFRS 9, financial liabilities may be designated at fair value, with gains and losses taken to the income statement within net trading income (Note 5) and net investment income (Note 6). Movements in own credit are reported through other comprehensive income, unless the effects of changes in the liability's credit risk would create or enlarge an accounting mismatch in P&L. In these scenarios, all gains and losses on that liability (including the effects of changes in the credit risk of the liability) are presented in P&L. On derecognition of the financial liability no amount relating to own credit risk is recycled to the income statement. The Group has the ability to make the fair value designation when holding the instruments at fair value reduces an accounting mismatch (caused by an offsetting liability or asset being held at fair value), or is managed by the Group on the basis of its fair value, or includes terms that have substantive derivative characteristics (Note 14). The details on how the fair value amounts are arrived at for financial liabilities designated at fair value are described in Note 17. Debt securities Deposits Repurchase agreements and other similar secured borrowing Other financial liabilities Financial liabilities designated at fair value The cumulative own credit net loss recognised is £307m (2022: £674m gain). 2023 2022 Fair value £m 68,261 43,552 Contractual amount due on maturity £m 82,820 44,862 Fair value £m 57,846 41,037 Contractual amount due on maturity £m 73,757 42,455 185,716 186,593 10 10 297,539 314,285 172,746 173,511 8 8 271,637 289,731 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 449 Notes to the financial statements (continued) Assets and liabilities held at fair value 17 Fair value of financial instruments Accounting for financial assets and liabilities – fair values Financial instruments that are held for trading are recognised at fair value through profit or loss. In addition, financial assets are held at fair value through profit or loss if they do not contain contractual terms that give rise on specified dates to cash flows that are SPPI, or if the financial asset is not held in a business model that is either (i) a business model to collect the contractual cash flows or (ii) a business model that is achieved by both collecting contractual cash flows and selling. Subsequent changes in fair value for these instruments are recognised in the income statement in net investment income, except if reporting it in trading income reduces an accounting mismatch. Wherever possible, fair value is determined by reference to a quoted market price for that instrument. For many of the Group’s financial assets and liabilities, especially derivatives, quoted prices are not available and valuation models are used to estimate fair value. The models calculate the expected cash flows under the terms of each specific contract and then discount these values back to a present value. These models use as their basis independently sourced market inputs including, for example, interest rate yield curves, equities and commodities prices, option volatilities and currency rates. For financial liabilities measured at fair value, the carrying amount reflects the effect on fair value of changes in own credit spreads derived from observable market data such as in primary issuance and redemption activity for structured notes. On initial recognition, it is presumed that the transaction price is the fair value unless there is observable information available in an active market to the contrary. For valuations that have made use of unobservable inputs, the difference between the model valuation and the initial transaction price (Day one profit) is recognised in profit or loss either: on a straight-line basis over the term of the transaction; or over the period until all inputs will become observable where appropriate; or released in full when previously unobservable inputs become observable. Various factors influence the availability of observable inputs and these may vary from product to product and change over time. Factors include the depth of activity in the relevant market, the type of product, whether the product is new and not widely traded in the marketplace, the maturity of market modelling and the nature of the transaction (bespoke or generic). To the extent that valuation is based on models or inputs that are not observable in the market, the determination of fair value can be more subjective, dependent on the significance of the unobservable input to the overall valuation. Unobservable inputs are determined based on the best information available, for example by reference to similar assets, similar maturities or other analytical techniques. The sensitivity of valuations used in the financial statements to possible changes in significant unobservable inputs is shown on page 456. Critical accounting estimates and judgements The valuation of financial instruments often involves a significant degree of judgement and complexity, in particular where valuation models make use of unobservable inputs (‘Level 3’ assets and liabilities). This note provides information on these instruments, including the related unrealised gains and losses recognised in the period, a description of significant valuation techniques and unobservable inputs, and a sensitivity analysis. Climate-related risks are assumed to be included in the fair values of assets and liabilities traded in active markets. Within less active markets, for counterparties and instruments identified as being more susceptible to climate change risk, an impact assessment was performed through increasing their probability of default. The change in valuation of the assets and liabilities from this assessment was sufficiently immaterial to necessitate any amendment to the reported year end valuations. Valuation Assets and liabilities according to a hierarchy that reflects the observability of significant market inputs. The three levels of the fair value hierarchy are defined below with judgement applied in determining the boundary between Level 2 and 3 classification. Quoted market prices – Level 1 Assets and liabilities are classified as Level 1 if their value is observable in an active market. Such instruments are valued by reference to unadjusted quoted prices for identical assets or liabilities in active markets where the quoted price is readily available, and the price represents actual and regularly occurring market transactions. An active market is one in which transactions occur with sufficient volume and frequency to provide pricing information on an ongoing basis. Valuation technique using observable inputs – Level 2 Assets and liabilities classified as Level 2 have been valued using models whose inputs are observable either directly or indirectly. Valuations based on observable inputs include assets and liabilities such as swaps and forwards which are valued using market standard pricing techniques, and options that are commonly traded in markets where all the inputs to the market standard pricing models are observable. For certain instruments that derive a fair value using unobservable inputs that are not considered significant, then the asset or liability may be classified as Level 2. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 450 Notes to the financial statements (continued) Assets and liabilities held at fair value Valuation technique using significant unobservable inputs – Level 3 Assets and liabilities are classified as Level 3 if their valuation incorporates significant inputs that are not based on observable market data (unobservable inputs). A valuation input is considered observable if it can be directly observed from transactions in an active market, or if there is compelling external evidence demonstrating an executable exit price. Unobservable input levels are generally determined via reference to observable inputs, historical observations or using other analytical techniques. The following table shows the Group’s assets and liabilities that are held at fair value disaggregated by valuation technique (fair value hierarchy) and balance sheet classification: Assets and liabilities held at fair value As at 31 December Trading portfolio assets Financial assets at fair value through the income statement Derivative financial assets Financial assets at fair value through other comprehensive income Investment property Total assets 2023 2022 Valuation technique using Valuation technique using Level 1 Level 2 Level 3 £m £m £m Total £m Level 1 Level 2 Level 3 £m £m £m Total £m 94,658 73,438 6,509 174,605 62,478 64,855 6,480 133,813 5,831 192,571 8,249 206,651 107 253,189 3,540 256,836 5,720 198,723 9,125 213,568 10,054 287,152 5,174 302,380 30,247 40,511 1,078 71,836 — — 2 2 130,843 559,709 19,378 709,930 20,704 44,347 — — 11 5 65,062 5 98,956 595,077 20,795 714,828 Trading portfolio liabilities Financial liabilities designated at fair value Derivative financial liabilities Total liabilities (29,274) (29,027) (117) (296,200) (81) (245,310) (29,472) (570,537) (368) (58,669) (1,222) (297,539) (4,653) (250,044) (6,243) (606,252) (44,128) (28,740) (56) (72,924) (133) (270,454) (1,050) (271,637) (10,823) (272,434) (6,363) (289,620) (55,084) (571,628) (7,469) (634,181) The following table shows the Group’s Level 3 assets and liabilities that are held at fair value disaggregated by product type: Level 3 assets and liabilities held at fair value by product type Interest rate derivatives Foreign exchange derivatives Credit derivatives Equity derivatives Corporate debt Reverse repurchase and repurchase agreements Loans Private equity investments 1 Other Total Note 2023 2022 Assets Liabilities Assets Liabilities £m 2,211 111 241 977 1,867 209 10,614 1,375 1,773 19,378 £m (1,701) (91) (820) (2,041) (352) (517) — (10) (711) (6,243) £m £m 2,362 1,513 290 1,009 1,677 37 11,233 1,291 1,383 (2,858) (1,474) (603) (1,428) (49) (434) — (8) (615) 20,795 (7,469) 1 Other includes funds and fund-linked products, issued debt, Government and Government sponsored debt, asset backed securities, equity cash products and investment property. Valuation techniques and sensitivity analysis Sensitivity analysis is performed on products with significant unobservable inputs (Level 3) to generate a range of reasonably possible alternative valuations. The sensitivity methodologies applied take account of the nature of the valuation techniques used, as well as the availability and reliability of observable proxy and historical data and the impact of using alternative models. Sensitivities are dynamically calculated on a monthly basis. The calculation is based on range or spread data of a reliable reference source or a scenario based on relevant market analysis alongside the impact of using alternative models. Sensitivities are calculated without reflecting the impact of any diversification in the portfolio. The valuation techniques used, observability and sensitivity analysis for material products within Level 3, are described below. Interest rate derivatives Description: Derivatives linked to interest rates or inflation indices. The category includes futures, interest rate and inflation swaps, swaptions, caps, floors, inflation options, balance guaranteed swaps and other exotic interest rate derivatives. Valuation: Interest rate and inflation derivatives are generally valued using curves of forward rates constructed from market data to project and discount the expected future cash flows of trades. Instruments with optionality are valued using volatilities implied from market inputs, and use industry standard or bespoke models depending on the product type. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 451 Notes to the financial statements (continued) Assets and liabilities held at fair value Observability: In general, inputs are considered observable up to liquid maturities which are determined separately for each input and underlying. Unobservable inputs are generally set by referencing liquid market instruments and applying extrapolation techniques or inferred via another reasonable method. Foreign exchange derivatives Description: Derivatives linked to the foreign exchange (FX) market. The category includes FX forward contracts, FX swaps and FX options. The majority are traded as over the counter (OTC) derivatives. Valuation: FX derivatives are valued using industry standard and bespoke models depending on the product type. Valuation inputs include FX rates, interest rates, FX volatilities, interest rate volatilities, FX interest rate correlations and others as appropriate. Observability: FX correlations, forwards and volatilities are generally observable up to liquid maturities which are determined separately for each input and underlying. Unobservable inputs are set by referencing liquid market instruments and applying extrapolation techniques, or inferred via another reasonable method. Credit derivatives Description: Derivatives linked to the credit spread of a referenced entity, index or basket of referenced entities or a pool of referenced assets (e.g. a securitised product). The category includes single name and index credit default swaps (CDS) and total return swaps (TRS). Valuation: CDS are valued on industry standard models using curves of credit spreads as the principal input. Credit spreads are observed directly from broker data, third party vendors or priced to proxies. Observability: CDS contracts referencing entities that are actively traded are generally considered observable. Other valuation inputs are considered observable if products with significant sensitivity to the inputs are actively traded in a liquid market. Unobservable valuation inputs are generally determined with reference to recent transactions or inferred from observable trades of the same issuer or similar entities. Equity derivatives Description: Exchange traded or OTC derivatives linked to equity indices and single names. The category includes vanilla and exotic equity products. Valuation: Equity derivatives are valued using industry standard models. Valuation inputs include stock prices, dividends, volatilities, interest rates, equity repurchase curves and, for multi-asset products, correlations. Observability: In general, valuation inputs are observable up to liquid maturities which are determined separately for each input and underlying. Unobservable inputs are set by referencing liquid market instruments and applying extrapolation techniques, or inferred via another reasonable method. Corporate debt Description: Primarily corporate bonds. Valuation: Corporate bonds are valued using observable market prices sourced from broker quotes, inter-dealer prices or other reliable pricing sources. Observability: Prices for actively traded bonds are considered observable. Unobservable bonds prices are generally determined by reference to bond yields or CDS spreads for actively traded instruments issued by or referencing the same (or a similar) issuer. Reverse repurchase and repurchase agreements Description: Includes securities purchased under resale agreements, securities sold under repurchase agreements, and other similar secured lending agreements. The agreements are primarily short-term in nature. Valuation: Repurchase and reverse repurchase agreements are generally valued by discounting the expected future cash flows using industry standard models that incorporate market interest rates and repurchase rates, based on the specific details of the transaction. Observability: Inputs are deemed observable up to liquid maturities or for consensus pricing with low pricing-range and are determined based on the specific features of the transaction. Unobservable inputs are generally set by referencing liquid market instruments and applying extrapolation techniques, or inferred via another reasonable method. Loans Description: A drawn lending facility issued to corporate clients and customers. Valuation: Loans are valued either using a price-based approach, or through models that discount expected future cash flows based on interest rates and loan spreads. Observability: Within this loan population, the price or loan spread may be generally unobservable. Private equity investments Description: Includes investments in equity holdings in operating companies not quoted on a public exchange. Valuation: Private equity investments are valued in accordance with the ‘International Private Equity and Venture Capital Valuation Guidelines’ which require the use of a number of individual pricing benchmarks such as the prices of recent transactions in the same or similar entities, discounted cash flow analysis and comparison with the earnings or revenue multiples of listed companies. While the valuation of unquoted equity instruments is subjective by nature, the relevant methodologies are commonly applied by other market participants and have been consistently applied over time. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 452 Notes to the financial statements (continued) Assets and liabilities held at fair value Observability: Inputs are considered observable if there is active trading in a liquid market of products with significant sensitivity to the inputs. Unobservable inputs include earnings or revenue estimates, multiples of comparative companies, marketability discounts and discount rates. Other Description: Other includes funds and fund-linked products, issued debt, government sponsored debt, asset backed securities, equity cash products and investment property. Assets and liabilities reclassified between Level 1 and Level 2 During the period, there were no material transfers between Level 1 and Level 2 (2022: there were no material transfers between Level 1 and Level 2). Level 3 movement analysis The following table summarises the movements in the Level 3 balances during the period. Transfers have been reflected as if they had taken place at the beginning of the year. Asset and liability transfers between Level 2 and Level 3 are primarily due to i) an increase or decrease in observable market activity related to an input or ii) a change in the significance of the unobservable input, with assets and liabilities classified as Level 3 if an unobservable input is deemed significant. Analysis of movements in Level 3 assets and liabilities Purchases Sales Issues Settlements Total gains and (losses) in the period recognised in the income statement Trading income2 Other income Total gains or (losses) recognised in OCI Corporate debt Loans Other Trading portfolio assets Corporate debt Loans Private equity investments Reverse repurchase and repurchase agreements Other Financial assets at fair value through the income statement Corporate debt Loans Private equity investments Other Assets at fair value through other comprehensive income As at 1 January 2023 £m 597 £m 352 £m (146) 4,837 1,425 (1,734) 1,046 1,617 (1,143) 6,480 3,394 (3,023) 1,080 40 (145) 6,396 3,630 (3,263) 1,284 97 (26) 37 328 166 33 — (1) 9,125 3,966 (3,435) — — 7 4 193 533 — 200 11 926 — — — — — £m — — — — — — — — — — — — — — — Investment properties 5 — (4) Trading portfolio liabilities (56) (367) 45 — Financial liabilities designated at fair value (1,050) (40) — (403) Interest rate derivatives Foreign exchange derivatives Credit derivatives Equity derivatives Net derivative financial instruments1 (496) 130 (31) 39 — (313) (351) — 56 (419) (419) (1) (1,189) (640) 24 — — — — — £m (220) (382) — £m 76 (34) (31) (602) 11 £m — — — — — (1,361) 10 176 (8) (14) (6) (64) 86 — 6 (62) (19) — (3) (1,429) 109 61 — — — — — — — — — — — — 1 — (38) (3) — — — (3) (3) — — — 58 37 (15) 87 (15) (2) 3 (162) 83 (92) — — — — — 59 239 (387) 8,249 As at 31 December 2023 £m 681 4,469 1,359 6,509 888 5,612 1,371 209 169 Out £m (34) (27) (749) (810) (89) (165) — — (133) — — — — — — 298 533 4 243 1,078 2 10 (368) Transfers In £m 56 384 619 — 1,059 £m — — — — — — — — — — — (3) — — — — — — — — — — 213 — — 26 105 — — 42 — — 11 51 — (3) 147 (147) 459 (1,222) 326 436 510 20 (579) (52) (5) (66) (1,064) 388 313 (1,113) Total 13,326 7,239 (6,393) (403) (1,951) (10) (3) 1,686 (415) 13,135 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 453 Notes to the financial statements (continued) Assets and liabilities held at fair value £m — — — — — — — — — — — — — Analysis of movements in Level 3 assets and liabilities As at 1 January 2022 Purchases Sales Issues Settlements Total gains and (losses) in the period recognised in the income statement Trading income2 Other income Total gains or (losses) recognised in OCI Corporate debt Loans Other Trading portfolio assets £m £m £m 389 394 (182) 758 7,009 (2,635) 1,134 665 (412) 2,281 8,068 (3,229) Corporate debt Loans 816 405 — 7,608 8,689 (7,559) Private equity investments 1,095 192 (64) Reverse repurchase and repurchase agreements Other Financial assets at fair value through the income statement 13 180 — 127 — — 9,712 9,413 (7,623) £m £m (18) (19) (39) (264) (298) (43) (335) (346) (189) 48 (1,485) (804) £m — — — — — — (24) — (2) 95 24 3 (66) — 3 (1,700) (634) (63) £m — — — — — — — — — — Transfers In £m 87 10 275 372 — 49 56 — 17 As at 31 December 2022 £m 597 4,837 1,046 6,480 1,080 6,396 1,284 37 328 Out £m (34) (22) (275) (331) — (102) — — — 122 (102) 9,125 Private equity investments Other Assets at fair value through other comprehensive income Investment properties — 38 38 7 — — — — — — — (1) — Trading portfolio liabilities (27) (23) 8 — — (32) (32) — — — — — — — — — 1 (2) (1) (1) — 6 — 6 — — — — — 7 4 11 5 9 — — (27) 4 (56) Financial liabilities designated at fair value (410) (286) — (98) 82 70 Interest rate derivatives Foreign exchange derivatives Credit derivatives Equity derivatives Net derivative financial instruments1 (260) (216) 2 (386) — (4) (1,405) (213) — — (2) — (2,049) (433) (2) — — — — — 54 (467) (6) 57 333 27 23 306 438 (111) — — — — — — — (448) 40 (1,050) — — — — — 431 — 11 431 (11) 571 (38) (496) 16 (12) 39 (313) (419) 537 148 (1,189) 13,326 Total Notes 9,552 16,739 (10,847) (98) (1,547) (1,012) (64) (1) 456 1 The derivative financial instruments are represented on a net basis. On a gross basis, derivative financial assets are £3,540m (2022: £5,174m) and derivative financial liabilities are £4,653m (2022: £6,363m). 2 Trading income represents gains and (losses) on level 3 financial instruments which in the majority are offset by losses and gains on financial instruments disclosed in level 2. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 454 Notes to the financial statements (continued) Assets and liabilities held at fair value Unrealised gains and losses on Level 3 financial assets and liabilities The following table discloses the unrealised gains and losses recognised in the year arising on Level 3 financial assets and liabilities held at year end. Unrealised gains and (losses) recognised during the period on Level 3 assets and liabilities held at year end As at 31 December Trading portfolio assets Financial assets at fair value through the income statement Fair value through other comprehensive income Investment property Trading portfolio liabilities Financial liabilities designated at fair value Net derivative financial instruments Total Note 2023 Income statement Trading income1 Other income Other compre- hensive income £m 10 113 — — — (38) (107) (22) £m — 72 — 1 — (3) — 70 £m — — (3) — — — — (3) 2022 Income statement Trading income1 Other income £m £m (290) (551) — — 8 55 (80) (858) — (66) — (1) — — — (67) Total £m 10 185 (3) 1 — (41) (107) 45 Other compre- hensive income £m — — 1 — — — — 1 Total £m (290) (617) 1 (1) 8 55 (80) (924) 1 Trading income represents gains and (losses) on level 3 financial instruments which in the majority are offset by losses and gains on financial instruments disclosed in level 2. Significant unobservable inputs The following table discloses the valuation techniques and significant unobservable inputs for material products recognised at fair value and classified as Level 3 along with the range of values used for those significant unobservable inputs: Valuation technique(s)1 Significant unobservable inputs Min Max Min Max Units2 2023 Range 2022 Range Derivative financial instruments3 Interest rate derivatives Discounted cash flows Correlation model Option model Credit derivatives Equity derivatives Discounted cash flows Comparable pricing Option model Discounted cash flow Non-derivative financial instruments Loans Discounted cash flows Comparable pricing EBITDA multiple Earnings multiple Discounted cash flow Comparable pricing Discounted cash flows Private equity investments Corporate debt Reverse repurchase and repurchase agreements Notes Discounted cash flows Repo spread Inflation forwards Credit spread Yield Growth curve Inflation forwards Inflation volatility Interest rate volatility FX - IR correlation IR - IR correlation Credit spread Price Equity volatility Equity - equity correlation Discount margin Loan spread Credit spread Yield Price EBITDA multiple Earnings multiple Credit spread Discount margin Price Loan spread 4 15 1 (1) — 66 26 (20) (20) 1 46 5 40 (238) 40 186 7 0 15 3 380 8 — — 385 7 1,672 7 2 — 257 515 78 98 765 99 138 100 110 802 870 18 287 17 25 630 10 352 — 468 3 17 (3) — (20) 49 36 (20) 12 3 79 3 40 (205) 50 200 5 0 11 4 496 8 0 229 321 5 2,159 56 — (13) 315 430 78 99 2,943 92 140 100 634 801 426 34 101 15 23 559 10 232 834 502 % bps % % % bps vol bps vol % % bps points % % bps bps bps % points Multiple Multiple bps % points bps bps 1 A range has not been provided for Net Asset Value as there would be a wide range reflecting the diverse nature of the positions. 2 The units used to disclose ranges for significant unobservable inputs are percentages, points and basis points. Points are a percentage of par; for example, 100 points equals 100% of par. A basis point equals 1/100th of 1%; for example, 150 basis points equals 1.5%. 3 Certain derivative instruments are classified as Level 3 due to a significant unobservable credit spread input into the calculation of the Credit Valuation Adjustment for the instruments. The range of significant unobservable credit spreads is between 29-1672bps (2022: 17-2,159bps). Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 455 Notes to the financial statements (continued) Assets and liabilities held at fair value The following section describes the significant unobservable inputs identified in the table above, and the sensitivity of fair value measurement of the instruments categorised as Level 3 assets or liabilities to increases in significant unobservable inputs. Where sensitivities are described, the inverse relationship will also generally apply. Where reliable interrelationships can be identified between significant unobservable inputs used in fair value measurement, a description of those interrelationships is included below. Forwards A price or rate that is applicable to a financial transaction that will take place in the future. In general, a significant increase in a forward in isolation will result in a fair value increase for the contracted receiver of the underlying (currency, bond, commodity, etc.), but the sensitivity is dependent on the specific terms of the instrument. Credit spread Credit spreads typically represent the difference in yield between an instrument and a benchmark security or reference rate. Credit spreads reflect the additional yield that a market participant demands for taking on exposure to the credit risk of an instrument and form part of the yield used in a discounted cash flow calculation. In general, a significant increase in credit spread in isolation will result in a movement in a fair value decrease for a cash asset. For a derivative instrument, a significant increase in credit spread in isolation can result in a fair value increase or decrease depending on the specific terms of the instrument. Volatility Volatility is a measure of the variability or uncertainty in return for a given derivative underlying. It is an estimate of how much a particular underlying instrument input or index will change in value over time. In general, volatilities are implied from observed option prices. For unobservable options the implied volatility may reflect additional assumptions about the nature of the underlying risk, and the strike/ maturity profile of a specific contract. In general a significant increase in volatility in isolation will result in a fair value increase for the holder of a simple option, but the sensitivity is dependent on the specific terms of the instrument. There may be interrelationships between unobservable volatilities and other unobservable inputs (e.g. when equity prices fall, implied equity volatilities generally rise) but these are generally specific to individual markets and may vary over time. Correlation Correlation is a measure of the relationship between the movements of two variables. Correlation can be a significant input into valuation of derivative contracts with more than one underlying instrument. Credit correlation generally refers to the correlation between default processes for the separate names that make up the reference pool of a CDO structure. A significant increase in correlation in isolation can result in a fair value increase or decrease depending on the specific terms of the instrument. Comparable price Comparable instrument prices are used in valuation by calculating an implied yield (or spread over a liquid benchmark) from the price of a comparable observable instrument, then adjusting that yield (or spread) to account for relevant differences such as maturity or credit quality. Alternatively, a price-to-price basis can be assumed between the comparable and unobservable instruments in order to establish a value. Loans includes a portfolio of loans extended to clients within the Group’s leveraged finance business. Leveraged finance loans are originated where Barclays provide financing commitments to clients to facilitate strategic transactions such as leverage buyouts and acquisitions. The sensitivity of the portfolio to unobservable inputs is judgmental reflecting their illiquid nature and the significance of unobservable price inputs to the valuation. In general, a significant increase in comparable price in isolation will result in an increase in the price of the unobservable instrument. For derivatives, a change in the comparable price in isolation can result in a fair value increase or decrease depending on the specific terms of the instrument. Loan spread Loan spreads typically represent the difference in yield between an instrument and a benchmark security or reference rate. Loan spreads typically reflect credit quality, the level of comparable assets such as gilts and other factors, and form part of the yield used in a discounted cash flow calculation. Loans containing unobservable input loan spreads into their valuation primarily consist of long-dated fixed rate loans extended to counterparties in the UK Education, Social Housing and Local Authority sectors (ESHLA). The loans are categorised as Level 3 in the fair value hierarchy due to their illiquid nature and the significance of unobservable loan spreads to the valuation. Valuation uncertainty arises from the long-dated nature of the portfolio, the lack of secondary market in the loans and the lack of observable loan spreads. The majority of ESHLA loans are to borrowers in heavily regulated sectors that are considered extremely low credit risk, and have a history of near zero defaults since inception. While the overall loan spread range is from 40bps to 307bps (2022: 50bps to 589bps), the vast majority of spreads are concentrated towards the bottom end of this range, with 98% of the loan notional being valued with spreads less than 200bps for the current period. In general, a significant increase in loan spreads in isolation will result in a fair value decrease for a loan. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 456 Notes to the financial statements (continued) Assets and liabilities held at fair value EBITDA multiple EBITDA multiple is the ratio of the valuation of the investment to the earnings before interest, taxes, depreciation and amortisation. In general, a significant increase in the multiple will result in a fair value increase for an investment. Earnings multiple Earnings or Revenue multiple is the ratio of the valuation of the investment to the earnings or revenue. In general, a significant increase in the multiple will result in a fair value increase for an investment. Sensitivity analysis of valuations using unobservable inputs 2023 2022 Favourable changes Unfavourable changes Favourable changes Unfavourable changes Income statement Equity Income statement Equity Income statement Equity Income statement Equity £m 78 4 27 142 34 612 263 126 1,286 £m — — — — — 2 1 1 4 £m (158) (9) (32) (226) (22) (801) (263) (118) (1,629) £m — — — — — (2) (1) (1) (4) £m 119 16 79 161 45 338 268 49 1,075 £m — — — — — — 1 — 1 £m (155) (22) (71) (168) (27) (551) (281) (52) (1,327) £m — — — — — — (1) — (1) Interest rate derivatives Foreign exchange derivatives Credit derivatives Equity derivatives Corporate debt Loans Private equity investments 1 Other Total Note 1 Other includes, Equity Cash Products, Fund and Fund Linked, Government and Government Sponsored Debt, Asset backed securities. The effect of stressing unobservable inputs to a range of reasonably possible alternatives, alongside considering the impact of using alternative models, would be to increase fair values by up to £1,290m (2022: £1,076m) or to decrease fair values by up to £1,633m (2022: £1,328m) with substantially all the potential effect impacting profit and loss. Unfavourable changes shown in the table above are partly provided for through the capital and prudential valuation adjustment framework Fair value adjustments Key balance sheet valuation adjustments are quantified below: Exit price adjustments derived from market bid-offer spreads Uncollateralised derivative funding Derivative credit valuation adjustments Derivative debit valuation adjustments Exit price adjustments derived from market bid-offer spreads 2023 £m (569) (4) (209) 144 2022 £m (577) (11) (319) 208 The Group uses mid-market pricing where it is a market maker and has the ability to transact at, or better than, mid price (which is the case for certain equity, bond and vanilla derivative markets). For other financial assets and liabilities, bid-offer adjustments are recorded to reflect the exit level for the expected close out strategy. The methodology for determining the bid-offer adjustment for a derivative portfolio involves calculating the net risk exposure by offsetting long and short positions by strike and term in accordance with the risk management and hedging strategy. Bid-offer levels are generally derived from market quotes such as broker data. Less liquid instruments may not have a directly observable bid-offer level. In such instances, an exit price adjustment may be derived from an observable bid-offer level for a comparable liquid instrument, or determined by calibrating to derivative prices, or by scenario or historical analysis. Exit price adjustments derived from market bid-offer spreads have decreased by £8m to £(569)m. Discounting approaches for derivative instruments Collateralised In line with market practice, the methodology for discounting collateralised derivatives takes into account the nature and currency of the collateral that can be posted within the relevant credit support annex (CSA). The CSA aware discounting approach recognises the ‘cheapest to deliver’ option that reflects the ability of the party posting collateral to change the currency of the collateral. Uncollateralised A fair value adjustment of £(4)m is applied to account for the impact of incorporating the cost of funding into the valuation of uncollateralised and partially collateralised derivative portfolios and collateralised derivatives where the terms of the agreement do not allow the rehypothecation of collateral received. The derivative funding adjustment has decreased by £7m to £(4)m . Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 457 Notes to the financial statements (continued) Assets and liabilities held at fair value Derivative credit and debit valuation adjustments Derivative credit valuation adjustments and Derivative debit valuation adjustments are incorporated into derivative valuations to reflect the impact on fair value of counterparty credit risk and Barclays’ own credit quality respectively. These adjustments are calculated for uncollateralised and partially collateralised derivatives across all asset classes. Derivative credit valuation adjustments and Derivative debit valuation adjustments are calculated using estimates of exposure at default, probability of default and recovery rates, at a counterparty level. Counterparties include (but are not limited to) corporates, sovereigns and sovereign agencies and supranationals. Exposure at default is generally estimated through the simulation of underlying risk factors through approximating with a more vanilla structure, or by using current or scenario-based mark to market as an estimate of future exposure. Probability of default and recovery rate information is generally sourced from the CDS markets. Where this information is not available, or considered unreliable, alternative approaches are taken based on mapping internal counterparty ratings onto historical or market- based default and recovery information. Derivative credit valuation adjustments decreased by £110m to £(209)m as a result of tightening input counterparty credit spreads. Derivative debit valuation adjustments decreased by £64m to £144m as a result of tightening input Barclays Bank PLC credit spreads . Correlation between counterparty credit and underlying derivative risk factors, termed ‘wrong-way,’ or ‘right-way’ risk, is not systematically incorporated into the derivative credit valuation adjustments calculation but is adjusted where the underlying exposure is directly related to the counterparty. Barclays continues to monitor market practices and activity to ensure the approach to uncollateralised derivative valuation remains appropriate. Portfolio exemptions The Group uses the portfolio exemption in IFRS 13 Fair Value Measurement to measure the fair value of groups of financial assets and liabilities. Instruments are measured using the price that would be received to sell a net long position (i.e. an asset) for a particular risk exposure or to transfer a net short position (i.e. a liability) for a particular risk exposure in an orderly transaction between market participants at the balance sheet date under current market conditions. Accordingly, the Group measures the fair value of the group of financial assets and liabilities consistently with how market participants would price the net risk exposure at the measurement date. Unrecognised gains as a result of the use of valuation models using unobservable inputs The amount that has yet to be recognised in income that relates to the difference between the transaction price (the fair value at initial recognition) and the amount that would have arisen had valuation models using unobservable inputs been used on initial recognition, less amounts subsequently recognised, is £205m (2022: £126m) for financial instruments measured at fair value and £192m (2022: £216m) for financial instruments carried at amortised cost. There are additions and FX loss of £136m (2022: £59m additions and FX gains), and amortisation and releases of £57m (2022: £66m) for financial instruments measured at fair value and additions of £0m (2022: £0m) and amortisation and releases of £24m (2022: £14m) for financial instruments measured at amortised cost. Third-party credit enhancements Structured and brokered certificates of deposit issued by Barclays are insured up to $250,000 per depositor by the Federal Deposit Insurance Corporation (FDIC) in the US. The FDIC is funded by premiums that Barclays and other banks pay for deposit insurance coverage. The carrying value of these issued certificates of deposit that are designated under the IFRS 9 fair value option includes this third party credit enhancement. The on-balance sheet value of these brokered certificates of deposit amounted to £5,162m (2022: £5,197m). Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 458 Notes to the financial statements (continued) Assets and liabilities held at fair value Comparison of carrying amounts and fair values for assets and liabilities not held at fair value The following table summarises the fair value of financial assets and liabilities measured at amortised cost on the Group’s balance sheet: As at 31 December Financial assets Debt securities at amortised cost Loans and advances at amortised cost Reverse repurchase agreements and other similar secured lending Assets included in disposal groups classified as held for sale Financial liabilities Deposits at amortised cost Repurchase agreements and other similar secured borrowing Debt securities in issue Subordinated liabilities Liabilities included in disposal groups classified as held for sale 2023 2022 Carrying amount Fair value Level 1 Level 2 Level 3 Carrying amount Fair value Level 1 Level 2 Level 3 £m £m £m £m £m £m £m £m £m £m 56,749 55,437 13,976 39,014 2,447 342,747 334,706 5,854 80,533 248,319 45,487 44,512 9,952 33,285 1,275 353,292 347,149 5,165 79,868 262,116 2,594 2,594 — 2,594 3,855 3,855 — 3,855 — — 776 776 — — — — 776 — — — (538,789) (538,502) (382,345) (150,757) (5,400) (545,782) (545,738) (426,016) (116,157) (3,565) (41,601) (41,601) — (41,601) (96,825) (98,123) — (95,999) (10,494) (10,803) — (10,608) — (27,052) (27,054) (2,124) (112,881) (113,276) (195) (11,423) (11,474) — — (27,054) (110,151) — (3,125) — (11,254) (220) (3,078) (3,078) — (3,078) — — — — — — The fair value is an estimate of the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As a wide range of valuation techniques are available, it may not be appropriate to directly compare this fair value information to independent market sources or other financial institutions. Different valuation methodologies and assumptions can have a significant impact on fair values which are based on unobservable inputs. Financial assets Loans and advances at amortised cost The fair value of loans and advances, for the purpose of this disclosure, is derived from discounting expected cash flows in a way that reflects the current market price for lending to issuers of similar credit quality. Where market data or credit information on the underlying borrowers is unavailable, a number of proxy/extrapolation techniques are employed to determine the appropriate discount rates. For 2023, the fair value is lower than carrying value mainly on fixed rate products driven by rising interest rates. The majority will be part of a wider portfolio which includes fair valued instruments that are not presented in this table. Reverse repurchase agreements and other similar secured borrowing The fair value of reverse repurchase agreements approximates carrying amount as these balances are generally short dated and fully collateralised. Financial liabilities Deposits at amortised cost In many cases, the fair value disclosed approximates carrying value because the instruments are short term in nature or have interest rates that reprice frequently, such as customer accounts and other deposits and short-term debt securities. The fair value for deposits with longer-term maturities, mainly time deposits, are estimated using discounted cash flows applying either market rates or current rates for deposits of similar remaining maturities. Consequently, the fair value discount is minimal. Repurchase agreements and other similar secured borrowing The fair value of repurchase agreements approximates carrying amounts as these balances are generally short dated. Debt securities in issue Fair values of other debt securities in issue are based on quoted prices where available, or where the instruments are short dated, carrying amount approximates fair value. Subordinated liabilities Fair values for dated and undated convertible and non-convertible loan capital are based on quoted market rates for the issuer concerned or issuers with similar terms and conditions. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 459 Notes to the financial statements (continued) Assets and liabilities held at fair value 18 Offsetting financial assets and financial liabilities The Group reports financial assets and financial liabilities on a net basis on the balance sheet only if there is a legally enforceable right to set-off the recognised amounts and there is intention to settle on a net basis, or to realise the asset and settle the liability simultaneously. The following table shows the impact of netting arrangements on: ▪ all financial assets and liabilities that are reported net on the balance sheet ▪ all derivative financial instruments and reverse repurchase and repurchase agreements and other similar secured lending and borrowing agreements that are subject to enforceable master netting arrangements or similar agreements, but do not qualify for balance sheet netting. The ‘Net amounts’ presented are not intended to represent the Group’s actual exposure to credit risk, as a variety of credit mitigation strategies are employed in addition to netting and collateral arrangements. Amounts subject to enforceable netting arrangements Effects of offsetting on-balance sheet Related amounts not offset Gross amounts Amounts offset1 Net amounts reported on the balance sheet Financial instruments Financial collateral2 Net amount Amounts not subject to enforceable netting arrangements3 Balance sheet total4 £m £m £m £m £m £m £m £m 307,429 (55,781) 251,648 (198,809) (41,247) 11,592 5,188 256,836 677,175 (527,864) 149,311 — (148,888) 423 984,604 (583,645) 400,959 (198,809) (190,135) 12,015 2,414 7,602 151,725 408,561 (297,449) 54,241 (243,208) 198,809 27,978 (16,421) (6,836) (250,044) (731,200) 527,864 (203,336) — (1,028,649) 582,105 (446,544) 198,809 203,336 231,314 — (23,980) (227,316) (16,421) (30,816) (477,360) As at 31 December 2023 Derivative financial assets Reverse repurchase agreements and 5 other similar secured lending Total assets Derivative financial liabilities Repurchase agreements and other 5 similar secured borrowing Total liabilities As at 31 December 2022 Derivative financial assets 374,253 (76,429) 297,824 (238,337) (45,981) 13,506 4,556 302,380 Reverse repurchase agreements and 5 other similar secured lending Total assets 558,977 (396,323) 162,654 — (162,024) 630 933,230 (472,752) 460,478 (238,337) (208,005) 14,136 2,803 7,359 165,457 467,837 Derivative financial liabilities (360,630) 76,530 (284,100) 238,337 26,639 (19,124) (5,520) (289,620) Repurchase agreements and other 5 similar secured borrowing Total liabilities Notes (571,774) 396,323 (175,451) — (932,404) 472,853 (459,551) 238,337 175,451 202,090 — (24,347) (199,798) (19,124) (29,867) (489,418) 1 Amounts offset for derivative financial assets additionally includes cash collateral netted of £7,527m (2022: £15,199m). Amounts offset for derivative financial liabilities additionally includes cash collateral netted of £9,067m (2022: £15,098m). Settlements assets and liabilities have been offset amounting to £29,297m (2022: £24,250m). 2 Financial collateral of £41,247m (2022: £45,981m) was received in respect of derivative assets, including £31,211m (2022: £34,547m) of cash collateral and £10,036m (2022: £11,434m) of non-cash collateral. Financial collateral of £27,978m (2022: £26,639m) was placed in respect of derivative liabilities, including £24,260m (2022: £25,222m) of cash collateral and £3,718m (2022: £1,417m) of non-cash collateral. The collateral amounts are limited to net balance sheet exposure so as to not include overcollateralisation. 3 This column includes contractual rights of set-off that are subject to uncertainty under the laws of the relevant jurisdiction. 4 The balance sheet total is the sum of ‘Net amounts reported on the balance sheet’ that are subject to enforceable netting arrangements and ‘Amounts not subject to enforceable netting arrangements’. 5 Reverse repurchase agreements and other similar secured lending of £151,725m (2022: £165,457m) is split by fair value £149,131m (2022: £164,681m) and amortised cost £2,594m (2022: £776m). Repurchase agreements and other similar secured borrowing of £227,316m (2022: £199,798m) is split by fair value £185,715m (2022: £172,746m) and amortised cost £41,601m (2022: £27,052m). Derivative assets and liabilities The ‘Financial instruments’ column identifies financial assets and liabilities that are subject to set-off under netting agreements, such as the ISDA Master Agreement or derivative exchange or clearing counterparty agreements, whereby all outstanding transactions with the same counterparty can be offset and close-out netting applied across all outstanding transactions covered by the agreements if an event of default or other predetermined events occur. Financial collateral refers to cash and non-cash collateral obtained, typically daily or weekly, to cover the net exposure between counterparties by enabling the collateral to be realised in an event of default or if other predetermined events occur. Repurchase and reverse repurchase agreements and other similar secured lending and borrowing The ‘Financial instruments’ column identifies financial assets and liabilities that are subject to set-off under netting agreements, such as Global Master Repurchase Agreements and Global Master Securities Lending Agreements, whereby all outstanding transactions with the same counterparty can be offset and close-out netting applied across all outstanding transactions covered by the agreements if an event of default or other predetermined events occur. Financial collateral typically comprises highly liquid securities which are legally transferred and can be liquidated in the event of counterparty default. These offsetting and collateral arrangements and other credit risk mitigation strategies used by the Group are further explained in the Credit risk management section. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 460 Notes to the financial statements (continued) Assets at amortised cost and other investments Assets at amortised cost and other investments The notes included in this section focus on the Group’s property, plant and equipment, leases and goodwill and intangible assets. Details regarding the Group’s liquidity and capital position can be found in the Treasury and Capital risk section. 19 Property, plant and equipment Accounting for property, plant and equipment Property, plant and equipment is stated at cost, which includes direct and incremental acquisition costs less accumulated depreciation and provisions for impairment, if required. Subsequent costs are capitalised if these result in enhancement of the asset. Depreciation is provided on the depreciable amount of items of property, plant and equipment on a straight-line basis over their estimated useful economic lives. Depreciation rates, methods and the residual values underlying the calculation of depreciation of items of property, plant and equipment are kept under review to take account of any change in circumstances including consideration on future Climate and Sustainability investments. The Group uses the following annual rates in calculating depreciation: Annual rates in calculating depreciation Freehold land Freehold buildings Leasehold property Costs of adaptation of freehold and leasehold property Equipment installed in freehold and leasehold property Computers and similar equipment Fixtures and fittings and other equipment Depreciation rate  Not depreciated 2-3.3% Over the remaining life of the lease 6-10% 6-10% 17-33% 9-20% Costs of adaptation and installed equipment are depreciated over the shorter of the life of the lease or the depreciation rates noted in the table above. Investment property The Group initially recognises investment property at cost, and subsequently at fair value at each balance sheet date, reflecting market conditions at the reporting date. Gains and losses on remeasurement are included in the income statement. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 461 Notes to the financial statements (continued) Assets at amortised cost and other investments Investment property Property Equipment Right of use assets1 £m £m £m Cost As at 1 January 2023 Additions 2 Disposals Exchange and other movements As at 31 December 2023 Accumulated depreciation and impairment As at 1 January 2023 Depreciation charge Impairment 2 Disposals Exchange and other movements As at 31 December 2023 Net book value Cost As at 1 January 2022 Additions Disposals Exchange and other movements As at 31 December 2022 Accumulated depreciation and impairment As at 1 January 2022 Depreciation charge Impairment Disposals Exchange and other movements As at 31 December 2022 Net book value Notes £m 5 — (3) — 2 — — — — — — 2 7 — (1) (1) 5 — — — — — — 5 3,585 112 (24) (95) 3,578 (1,642) (163) (33) 10 50 (1,778) 1,800 4,131 273 (923) 104 3,585 (2,255) (181) (23) 882 (65) (1,642) 1,943 3,018 297 (954) (14) 2,347 (2,244) (256) — 944 (7) 1,950 20 (50) 82 2,002 (157) (27) 48 21 (1,563) (1,171) 784 831 3,210 313 (641) 136 3,018 (2,586) (227) 0 630 (61) 1,920 37 (68) 61 1,950 (872) (206) (22) 65 (21) (2,244) (1,056) 774 894 Total £m 8,558 429 (1,031) (27) 7,929 (576) (60) 1,002 64 (4,512) 3,417 9,268 623 (1,633) 300 8,558 (5,713) (614) (45) 1,577 (147) (4,942) 3,616 (1,056) (4,942) 1 Right of use (ROU) asset balances relate to property leases under IFRS 16. Refer to Note 20 for further details. 2 Disposals primarily pertain to fully depreciated assets which are not in use. Property rentals of £12m (2022: £10m) have been included in other income. The fair value of investment property is determined by reference to current market prices for similar properties, adjusted as necessary for condition and location, or by reference to recent transactions updated to reflect current economic conditions. Discounted cash flow techniques may be employed to calculate fair value where there have been no recent transactions, using current external market inputs such as market rents and interest rates. Valuations are carried out by management with the support of appropriately qualified independent valuers. 20 Leases Accounting for leases When the Group is the lessee, it is required to recognise both: ▪ A lease liability, measured at the present value of remaining cash flows on the lease, and ▪ A right of use (ROU) asset, measured at the amount of the initial measurement of the lease liability, plus any lease payments made prior to commencement date, initial direct costs, and estimated costs of restoring the underlying asset to the condition required by the lease, less any lease incentives received. Subsequently the lease liability will increase for the accrual of interest, resulting in a constant rate of return throughout the life of the lease, and reduce when payments are made. The right of use asset will amortise to the income statement over the life of the lease. When the lease liability is remeasured, a corresponding adjustment is made to the carrying amount of the ROU asset, or is recorded in the income statement if the carrying amount of the ROU asset has been reduced to nil. On the balance sheet, the ROU assets are included within property, plant and equipment and the lease liabilities are included within other liabilities. The Group applies the recognition exemption in IFRS 16 for leases with a term not exceeding 12 months. For these leases the lease payments are recognised as an expense on a straight line basis over the lease term unless another systematic basis is more appropriate. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 462 Notes to the financial statements (continued) Assets at amortised cost and other investments When the Group is the lessor, the lease must be classified as either a finance lease or an operating lease. A finance lease is a lease which confers substantially all the risks and rewards of the leased assets on the lessee. An operating lease is a lease where substantially all of the risks and rewards of the leased asset remain with the lessor. As a Lessor Finance lease receivables are included within loans and advances at amortised cost. The following table sets out a maturity analysis of lease receivables, showing the lease payments to be received after the reporting date. 2023 2022 Gross investment in finance lease receivables Future finance income Present value of minimum lease payments receivable Unguaranteed residual values Gross investment in finance lease receivables Future finance income Present value of minimum lease payments receivable Unguaranteed residual values £m 3 2 — — — — 5 £m — — — — — — — £m 3 2 — — — — 5 £m — — — — — — — £m 14 9 2 1 1 1 £m (1) (1) — — — — £m 13 8 2 1 1 1 28 (2) 26 £m — — — — — — — Not more than one year One to two years Two to three years Three to four years Four to five years Over five years Total Barclays Asset Finance provided leasing and other asset finance facilities across a broad range of asset types to business and individual customers. There is no significant impairment allowance for finance lease receivables in current and previous year. The Group does not have any material operating leases as a lessor. Finance lease income Finance lease income is included within interest income. The following table shows amounts recognised in the income statement during the year. Finance income from net investment in lease Profit on sales As a Lessee 2023 £m 1 — 2022 £m 2 — The Group leases various offices, branches and other premises under non-cancellable lease arrangements to meet its operational business requirements. In some instances, Barclays will sublease property to third parties when it is no longer needed to meet business requirements. Currently, Barclays does not have any material subleasing arrangements. ROU asset balances relate to property leases only. Refer to Note 19 for the carrying amount of ROU assets. The total expenses recognised during the year for short term leases were £2m (2022: £1m). The portfolio of short term leases to which Barclays is exposed at the end of the year is not dissimilar to the expenses recognised in the year. Lease liabilities As at 1 January Interest expense New leases Disposals 1 Cash payments Exchange and other movements As at 31 December (see Note 22) Note 1 Cash payments include one time lease liability payment of £182m related to structural cost action in relation to the real estate review. 2023 £m 1,216 54 19 (11) (406) 99 971 2022 £m 1,317 56 42 (13) (239) 53 1,216 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 463 Notes to the financial statements (continued) Assets at amortised cost and other investments The below table sets out a maturity analysis of undiscounted lease liabilities, showing the lease payments after the reporting date. Undiscounted lease liabilities maturity analysis Not more than one year One to two years Two to three years Three to four years Four to five years Five to ten years Greater than ten years Total undiscounted lease liabilities as at 31 December 2023 £m 174 169 144 120 97 338 282 2022 £m 229 216 193 160 140 457 105 1,324 1,500 In addition to the cash flows identified above, Group is exposed to: ▪ Variable lease payments: This variability will typically arise from either inflation index instruments or market-based pricing adjustments. Currently, Barclays has 517 (2022: 401) leases out of the total 756 (2022: 896) leases which have variable lease payment terms based on market-based pricing adjustments. Of the gross cash flows identified above £1,062m (2022: £1,087m) is attributable to leases with some degree of variability predominately linked to market-based pricing adjustments. ▪ Extension and termination options: The table above represents Barclays' best estimate of future cash outflows for leases, including assumptions regarding the exercising of contractual extension and termination options. The above gross cash flows have been reduced by £441m (2022: £516m) for leases where Barclays is highly expected to exercise an early termination option. However, there is no significant impact where Barclays is expected to exercise an extension option. In 2023, Group does not have any sale and leaseback transaction (2022: £88m). The Group does not have any restrictions or covenants imposed by the lessor on its property leases which restrict its businesses. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 464 Notes to the financial statements (continued) Assets at amortised cost and other investments 21 Goodwill and intangible assets Accounting for goodwill and intangible assets Goodwill Goodwill arising on the acquisition of subsidiaries represents the excess of the fair value of the purchase consideration over the fair value of the Group’s share of the assets acquired and the liabilities and contingent liabilities assumed on the date of the acquisition. Goodwill is reviewed annually for impairment, or more frequently when there are indications that impairment may have occurred. The test involves comparing the carrying value of a cash generating unit (CGU) including goodwill with the present value of the pre-tax cash flows, discounted at a rate of interest that reflects the inherent risks, of the CGU to which the goodwill relates, or the CGU's fair value if this is higher. Intangible assets Intangible assets are initially recognised when they are separable or arise from contractual or other legal rights, the cost can be measured reliably and, in the case of intangible assets not acquired in a business combination, where it is probable that future economic benefits attributable to the assets will flow from their use. For internally generated intangible assets, only costs incurred during the development phase are capitalised. Expenditure in the research phase is expensed when it is incurred. Intangible assets are stated at cost (which is, in the case of assets acquired in a business combination, the acquisition date fair value) less accumulated amortisation and impairment, if any, and are amortised over their useful lives in a manner that reflects the pattern to which they contribute to future cash flows, generally using the amortisation periods set out below: Annual rates in calculating amortisation Amortisation period Goodwill 1 Internally generated software Other software Customer lists Licences and other Note Not amortised 12 months to 6 years 12 months to 6 years 12 months to 25 years 12 months to 25 years 1 Exceptions to the above rate relate to useful lives of certain core banking platforms that are assessed individually and, if appropriate, amortised over longer periods ranging from 10 to 15 years. Intangible assets are reviewed for impairment when there are indications that impairment may have occurred. Intangible assets not yet available for use are reviewed annually for impairment. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 465 Notes to the financial statements (continued) Assets at amortised cost and other investments Intangible assets Goodwill £m Internally generated software £m Other software £m Brand £m Customer lists £m Licences and other £m 4,737 311 — (13) 5,035 (825) — — (33) — (858) 4,177 4,718 — — 19 4,737 7,627 1,203 (1,546) (94) 7,190 (4,195) 1,546 (1,050) (309) 43 (3,965) 3,225 7,180 1,047 (774) 174 7,627 620 164 19 (86) 717 (385) (26) (69) (3) 5 (478) 239 626 18 (36) 12 620 (825) (3,884) (364) — — — — (825) 3,912 774 (946) (18) (121) (4,195) 3,432 36 (50) — (7) (385) 235 — 7 — — 7 — — (1) — — (1) 6 — — — — — — — — — — — — 1,654 — — (85) 1,569 (1,475) — (39) — 76 (1,438) 131 1,431 76 (12) 159 1,654 (1,300) 12 (44) — (143) (1,475) 179 984 4 (2) (830) 156 (503) 2 (49) — 410 (140) 16 908 19 (39) 96 984 (429) 39 (69) — (44) (503) 481 Total £m 15,622 1,689 (1,529) (1,108) 14,674 (7,383) 1,522 (1,208) (345) 534 (6,880) 7,794 14,863 1,160 (861) 460 15,622 (6,802) 861 (1,109) (18) (315) (7,383) 8,239 2023 Cost As at 1 January 2023 Additions 1 Disposals 2 Exchange and other movements As at 31 December 2023 Accumulated amortisation and impairment As at 1 January 2023 1 Disposals Amortisation charge Impairment charge 2 Exchange and other movements As at 31 December 2023 Net book value 2022 As at 1 January 2022 Additions 1 Disposals Exchange and other movements As at 31 December 2022 Accumulated amortisation and impairment As at 1 January 2022 1 Disposals Amortisation charge Impairment charge Exchange and other movements As at 31 December 2022 Net book value Notes 1 Disposals pertain to fully amortised assets which are not in use. 2 In the current year the group has reclassified assets with a total net book value of £412m recognised on balance sheet relating to sign-on bonus payments made to co-brand credit card partners from Intangible Assets (Licenses and other) to Other Assets. This change in classification has been made to more appropriately reflect the nature of the assets. The German consumer finance business moved to assets held for sale during the year and this resulted in an impairment of Intangible assets of £32m. Goodwill Goodwill and Intangible assets are allocated to business operations according to business segments as follows: Barclays UK Barclays International Head Office Total 2023 Goodwill Intangibles £m 3,872 267 38 4,177 £m 1,096 2,519 2 3,617 Total £m 4,968 2,786 40 7,794 2022 Goodwill Intangibles £m 3,560 310 42 3,912 £m 1,263 3,062 2 4,327 Total £m 4,823 3,372 44 8,239 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 466 Notes to the financial statements (continued) Assets at amortised cost and other investments Critical accounting estimates and judgements Goodwill Testing goodwill for impairment involves a significant amount of judgement. Goodwill is allocated to CGUs for the purpose of impairment testing. The review of goodwill for impairment involves calculating a value in use (VIU) valuation which is compared to the carrying value of a CGU associated with the goodwill to determine whether any impairment has occurred. This includes the identification of independent CGUs across the organisation and the allocation of goodwill to those CGUs. The calculation of a value in use contains a high degree of uncertainty in estimating the future cash flows and the rates used to discount them. Key judgements include determining the carrying value of the CGU, the cash flows and discount rates used in the calculation. ▪ The cash flow forecasts used by management involve judgement and are based upon a view of the prospects of the business and market conditions at the point in time the assessment is prepared, including the potential effect of climate change. The estimation of cash flows is sensitive to the periods for which detailed forecasts are available and to assumptions regarding long-term sustainable cash flows. ▪ The discount rates applied to the future cash flows also involve judgement as they can have a significant impact on the valuation. The discount rates used are compared to market participants to ensure that they are appropriate and based on an estimated cost of equity for each CGU. ▪ The choice of a terminal growth rate used to determine the present value of the future cash flows of the CGUs is also a judgement that can impact the outcome of the assessment. The terminal growth rate and discount rates used may vary due to external market rates and economic conditions that are beyond management’s control, including the potential effect of climate change. Further details of some of the key judgements are set out below. 2023 impairment review The 2023 impairment review was performed during Q4 2023, with the approach and analysis set out below. Determining the carrying value of CGUs The carrying value for each CGU is the sum of the tangible equity, goodwill and intangible asset balances associated with that CGU. The Group manages the assets and liabilities of its CGUs with reference to the tangible equity of the respective businesses. That tangible equity is derived from the level of risk weighted assets (RWAs) and capital required to be deployed in the CGU and therefore reflects its relative risk, as well as the level of capital that management consider a market participant would be required to hold and retain to support business growth. Goodwill is initially allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the acquisition that generated it. Goodwill is only reallocated if there is a change in its use or when reporting structures are altered in a way that changes the composition of one or more cash-generating units to which goodwill has been allocated. During the year, the Merchant Acquiring business was split from the Cards & Payments business and was identified as a CGU. Cash flows The five-year cash flows used in the calculation are based on the formally agreed medium-term plans approved by the Board. These are prepared using macroeconomic assumptions which management consider reasonable and supportable, and reflect business agreed initiatives for the forecast period. The macroeconomic assumptions underpinning the medium term plan were determined during 2023 and management has considered whether there are subsequent significant changes in those assumptions which would adversely impact the results of the impairment review. As required by IAS 36, estimates of future cash flows exclude cash inflows or outflows that are expected to arise from restructuring initiatives where a constructive obligation to carry out the plan does not yet exist. In line with prior year treatment, the Education, Social Housing and Local Authority (ESHLA) portfolio has been excluded from the Business Banking CGU cash flows. This is a legacy loan portfolio which was previously within the Non-Core bank and was not part of the business to which the goodwill relates. As such, the cash flows relating to this portfolio have been excluded from the Business Banking VIU calculation. Discount rates IAS 36 requires that the discount rate used in a value in use calculation reflects the pre-tax rate an investor would require if they were to choose an investment that would generate similar cash flows to those that the entity expects to generate from the asset. In determining the discount rate, management identified the cost of equity associated with market participants that closely resemble the Group's CGUs. The cost of equity has been used as the discount rate in the impairment assessment and applied to the post tax cash flows of the CGU. This post-tax method incorporates the impact of changing tax rates on the cash flows and is expected to produce the same VIU result as a pre-tax method adjusted for varying tax rates. Using the resultant VIU the equivalent pre-tax discount rate has been calculated. The cost of equity rate used for all CGUs in this year’s calculation has been increased to the reflect the relative volatility of Barclays PLC’s stock price versus the average of our peers. The range of equivalent pre-tax discount rates applicable across the CGUs range from 14.7% to 18.5% (2022: 14.1% to 16.5%). Terminal growth rate The terminal growth rate is used to estimate the effect of projecting cash flows to the end of an asset’s useful economic life. It is management’s judgement that the cash flows associated with the CGUs will grow in line with the major economies in which the Group operates. Inflation rates are used as an approximation of future growth rates and form the basis of the terminal growth rates applied. The terminal growth rate used is 2.0% (2022: 2.0%). Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 467 Notes to the financial statements (continued) Assets at amortised cost and other investments Outcome of goodwill and intangibles review The Personal Banking and Business Banking CGUs carry the majority of the Group’s goodwill balance, predominantly as a consequence of the Woolwich acquisition. The goodwill within Personal Banking was £3,064m ( 2022: £2,752m), of which £2,501m (2022: £2,501m) was attributable to Woolwich, and within Business Banking was £629m (2022: £629m), fully attributable to Woolwich. The largest portion of the Group's intangible assets sits within the Investment Bank CGU, part of Barclays International with an allocation of £1,043m (2022: £919m). The recoverable amount for both Personal Banking and Business Banking have decreased in comparison to the 2022 impairment review, reflective of changes in the interest rate and macroeconomic outlook. An impairment of £33m of goodwill and £257m of intangible assets has been identified and recognised for the year, fully impairing the goodwill and intangibles of the Merchant Acquiring CGU. In all other CGUs, the value in use exceeds the carrying value and no impairment has been identified. The outcome of the impairment review for Personal Banking, Business Banking, Barclaycard UK and Cards and Payments are set out below: Cash generating unit Tangible equity Goodwill Intangibles Carrying value Value in use Value in use exceeding carrying value Value in use exceeding carrying value 2022 Personal Banking Cards and Payments Business Banking Barclaycard UK Total £m 6,130 3,626 1,836 1,938 £m 3,066 180 629 179 £m 740 800 239 164 £m 9,936 4,606 2,704 2,281 13,530 4,054 1,943 19,527 £m 12,297 5,342 5,990 2,307 25,936 £m 2,361 736 3,286 26 6,409 £m 4,667 1,598 6,623 364 13,252 All CGUs showed a reduction in value in use in the period which is mainly attributable to the increase in the discount rates used in the assessment as a result of increases in interest rates as well as the introduction of the Barclays share price volatility premium. The value in use for Barclaycard UK has reduced to a level that an adverse movement in any of the key judgement areas would result in an impairment. Sensitivity of key judgements The CGUs are sensitive to possible adverse changes in the key assumptions that support the recoverable amount: Cash flows: The medium-term plans used to determine the cash flows used in the VIU calculation rely on macroeconomic forecasts, including interest rates, GDP and unemployment, and forecast levels of market and client activity. Interest rate assumptions impact planned cash flows from both customer income and structural hedge contributions and therefore cash flow expectations are highly sensitive to movements in the yield curve. The cash flows also contain assumptions with regard to the prudential and financial conduct regulatory environment which may be subject to change. Given the current level of economic uncertainty, a 10% reduction in cash flows has been provided to show the sensitivity of the outcome to a change in these key assumptions. Discount rate: The discount rate should reflect the market risk-free rate adjusted for the inherent risks of the business it is applied to. Management have identified discount rates for comparable businesses and consider these to be a reasonable estimate of a suitable market rate for the profile of the business unit being tested. The risk that these discount rates may not be appropriate is quantified below and shows the impact of a 100bps change in the discount rate. Terminal growth rate: The terminal growth rate is used to estimate the cash flows into perpetuity based on the expected longevity of the CGU's businesses. The terminal growth rate is sensitive to uncertainties in the macroeconomic environment. The risk that using inflation data may not be appropriate for its determination is quantified below and shows the impact of 100bps change in the terminal growth rate. Allocated capital rate: Tangible equity is allocated based on the level of risk weighted assets (RWAs) and capital required to be deployed in the CGU which is dependent on the relative risk of businesses. The capital ratio used in determining the level of tangible equity allocated to the CGU and its capital cash flows could move over time. The impact of a 50bps increase in capital ratio is quantified below. The sensitivity of the value in use to key judgements in the calculations for certain CGUs holding goodwill balances is set out below: Reduction in headroom Change required to reduce headroom to zero Cash generating unit Carrying value Value in use Value in use exceeding carrying value Discount rate Terminal growth rate 100 bps increase in the discount rate 100 bps decrease in terminal growth rate 50 bps increase to allocated capital rate 10% reduction in forecasted cash flows Discount rate Terminal growth rate Allocated capital rate Personal Banking Cards and Payments Total £m £m £m 9,936 12,297 2,361 4,606 5,342 736 14,542 17,639 3,097 % 18.2 16.8 % £m £m £m £m 2.0 (1,042) (710) (263) (1,337) 2.0 (647) (473) (250) (724) % 2.5 1.2 % (4.1) (1.6) % 4.5 1.5 Cash flows % (17.6) (10.2) Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 468 Notes to the financial statements (continued) Accruals, provisions, contingent liabilities and legal proceedings Accruals, provisions, contingent liabilities and legal proceedings The notes included in this section focus on the Group’s accruals, provisions and contingent liabilities. Provisions are recognised for present obligations arising as consequences of past events where it is probable that a transfer of economic benefit will be necessary to settle the obligation, and it can be reliably estimated. Contingent liabilities reflect potential liabilities that are not recognised on the balance sheet. 22 Other liabilities Accruals and deferred income Other creditors Items in the course of collection due to other banks Lease liabilities (refer to Note 20) Other liabilities 23 Provisions Accounting for provisions 2023 £m 4,315 6,638 89 971 12,013 2022 £m 4,618 7,870 85 1,216 13,789 Provisions are recognised for present obligations arising as consequences of past events where it is more likely than not that a transfer of economic benefit will be necessary to settle the obligation, which can be reliably estimated. Critical accounting estimates and judgements The financial reporting of provisions involves a significant degree of judgement and is complex. Identifying whether a present obligation exists and estimating the probability, timing, nature and quantum of the outflows that may arise from past events requires judgements to be made based on the specific facts and circumstances relating to individual events and often requires specialist professional advice. When matters are at an early stage, accounting judgements and estimates can be difficult because of the high degree of uncertainty involved. Management continues to monitor matters as they develop to re-evaluate on an ongoing basis whether provisions should be recognised, however there can remain a wide range of possible outcomes and uncertainties, particularly in relation to legal, competition and regulatory matters, and as a result it is often not practicable to make meaningful estimates even when matters are at a more advanced stage. The amount that is recognised as a provision can also be very sensitive to the assumptions made in calculating it. This gives rise to a large range of potential outcomes which require judgement in determining an appropriate provision level. See Note 25 for more detail of legal, competition and regulatory matters. As at 1 January 2023 Additions Amounts utilised Unused amounts reversed Exchange and other movements As at 31 December 2023 Undrawn contractually committed facilities and guarantees1 As at 1st January 2023 Net change in expected credit loss provision and other movements As at 31 December 2023 Total Provisions As at 1st January 2023 As at 31 December 2023 Note Redundancy and restructuring Customer redress Legal, competition and regulatory matters Sundry provisions £m 136 469 (166) (38) (4) 397 £m 378 84 (152) (60) 45 295 £m 159 29 (75) (11) (3) 99 £m 288 132 (56) (69) (6) 289 Total £m 961 714 (449) (178) 32 1,080 583 (79) 504 1,544 1,584 1 Undrawn contractually committed facilities and guarantees provisions are accounted for under IFRS 9. Further analysis of the movement in the expected credit loss provision is disclosed within the 'Movement in gross exposures and impairment allowance including provisions for loan commitments and financial guarantees' table on page 298. Provisions expected to be recovered or settled within no more than 12 months after 31 December 2023 were £1,357m (2022: £1,348m). Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 469 Notes to the financial statements (continued) Accruals, provisions, contingent liabilities and legal proceedings Redundancy and restructuring These provisions comprise the estimated cost of restructuring, including redundancy costs where an obligation exists. For example, when the Group has a detailed formal plan for restructuring a business and has raised valid expectations in those affected by the restructuring by announcing its main features or starting to implement the plan. Customer redress Customer redress provisions comprise the estimated cost of making redress payments to customers, clients and counterparties for losses or damages associated with inappropriate judgement in the execution of the Group’s business activities. Legal, competition and regulatory matters The Group is engaged in various legal proceedings, both in the UK and a number of other overseas jurisdictions, including the US. For further information in relation to legal proceedings and discussion of the associated uncertainties, refer to Note 25. Sundry provisions This category includes provisions that do not fit into any of the other categories, such as fraud losses and dilapidation provisions. Undrawn contractually committed facilities and guarantees Impairment allowance under IFRS 9 considers both the drawn and the undrawn counterparty exposure. For retail portfolios, the total impairment allowance is allocated to the drawn exposure to the extent that the allowance does not exceed the exposure as ECL is not reported separately. Any excess is reported on the liability side of the balance sheet as a provision. For wholesale portfolios, the impairment allowance on the undrawn exposure is reported on the liability side of the balance sheet as a provision. For further information, refer to the Credit risk section for loan commitments and financial guarantees on page 298. 24 Contingent liabilities and commitments Accounting for contingent liabilities Contingent liabilities are possible obligations whose existence will be confirmed only by uncertain future events and present obligations where the transfer of economic resources is uncertain or cannot be reliably measured. Contingent liabilities are not recognised on the balance sheet but are disclosed unless the likelihood of an outflow of economic resources is remote. The following table summarises the nominal principal amount of contingent liabilities and commitments which are not recorded on- balance sheet: Guarantees and letters of credit pledged as collateral security Performance guarantees, acceptances and endorsements Total contingent liabilities and financial guarantees Of which: Financial guarantees and letters of credit carried at fair value Documentary credits and other short-term trade related transactions Standby facilities, credit lines and other commitments Total commitments Of which: Loan commitments carried at fair value 2023 £m 17,353 7,987 25,340 1,266 2,352 388,085 390,437 15,203 2022 £m 17,760 6,445 24,205 1,423 1,748 393,760 395,508 13,471 Provisions for expected credit losses held against contingent liabilities and commitments equal £504m (2022: £583m) and are reported in Note 23. Further details on contingent liabilities relating to legal and competition and regulatory matters can be found in Note 25. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 470 Notes to the financial statements (continued) Accruals, provisions, contingent liabilities and legal proceedings 25 Legal, competition and regulatory matters The Group faces legal, competition and regulatory challenges, many of which are beyond our control. The extent of the impact of these matters cannot always be predicted but may materially impact our operations, financial results, condition and prospects. Matters arising from a set of similar circumstances can give rise to either a contingent liability or a provision, or both, depending on the relevant facts and circumstances. The recognition of provisions in relation to such matters involves critical accounting estimates and judgments in accordance with the relevant accounting policies applicable to Note 24, Provisions. We have not disclosed an estimate of the potential financial impact or effect on the Group of contingent liabilities where it is not currently practicable to do so. Various matters detailed in this note seek damages of an unspecified amount. While certain matters specify the damages claimed, such claimed amounts do not necessarily reflect the Group’s potential financial exposure in respect of those matters. Matters are ordered under headings corresponding to the financial statements in which they are disclosed. 1. Barclays PLC and Barclays Bank PLC Investigations into certain advisory services agreements and other proceedings FCA proceedings In 2008, Barclays Bank PLC and Qatar Holdings LLC entered into two advisory service agreements (the Agreements). The Financial Conduct Authority (FCA) conducted an investigation into whether the Agreements may have related to Barclays PLC’s capital raisings in June and November 2008 (the Capital Raisings) and therefore should have been disclosed in the announcements or public documents relating to the Capital Raisings. In 2013, the FCA issued warning notices (the Warning Notices) finding that Barclays PLC and Barclays Bank PLC acted recklessly and in breach of certain disclosure-related listing rules, and that Barclays PLC was also in breach of Listing Principle 3. The financial penalty provided in the Warning Notices was £50m. Barclays PLC and Barclays Bank PLC contested the findings. In September 2022, the FCA’s Regulatory Decisions Committee (RDC) issued Decision Notices finding that Barclays PLC and Barclays Bank PLC breached certain disclosure-related listing rules. The RDC also found that in relation to the disclosures made in the Capital Raising of November 2008, Barclays PLC and Barclays Bank PLC acted recklessly, and that Barclays PLC breached Listing Principle 3. The RDC upheld the combined penalty of £50m on Barclays PLC and Barclays Bank PLC, the same penalty as in the Warning Notices. Barclays PLC and Barclays Bank PLC have referred the RDC’s findings to the Upper Tribunal for reconsideration. Other proceedings In November 2023, Barclays received requests for arbitration from two Jersey special purpose vehicles connected to PCP International Finance Limited asserting claims in relation to the October 2008 capital raising. Barclays is defending these claims. Investigations into LIBOR and other benchmarks and related civil actions Regulators and law enforcement agencies, including certain competition authorities, from a number of governments have conducted investigations relating to Barclays Bank PLC’s involvement in allegedly manipulating certain financial benchmarks, such as LIBOR. Various individuals and corporates in a range of jurisdictions have threatened or brought civil actions against the Group and other banks in relation to the alleged manipulation of LIBOR and/or other benchmarks. USD LIBOR civil actions The majority of the USD LIBOR cases, which have been filed in various US jurisdictions, have been consolidated for pre-trial purposes in the US District Court in the Southern District of New York (SDNY). The complaints are substantially similar and allege, among other things, that Barclays PLC, Barclays Bank PLC, Barclays Capital Inc. (BCI) and other financial institutions individually and collectively violated provisions of the US Sherman Antitrust Act (Antitrust Act), the US Commodity Exchange Act (CEA), the US Racketeer Influenced and Corrupt Organizations Act (RICO), the US Securities Exchange Act of 1934 and various state laws by manipulating USD LIBOR rates. Putative class actions and individual actions seek unspecified damages with the exception of one lawsuit, in which the plaintiffs are seeking no less than $100m in actual damages and additional punitive damages against all defendants, including Barclays Bank PLC. Some of the lawsuits also seek trebling of damages under the Antitrust Act and RICO. Sterling LIBOR civil actions In 2016, two putative class actions filed in the SDNY against Barclays Bank PLC, BCI and other Sterling LIBOR panel banks alleging, among other things, that the defendants manipulated the Sterling LIBOR rate in violation of the Antitrust Act, CEA and RICO, were consolidated. The defendants’ motion to dismiss the claims was granted in 2018. The plaintiffs have appealed the dismissal. Japanese Yen LIBOR civil actions In 2012, a putative class action was filed in the SDNY against Barclays Bank PLC and other Japanese Yen LIBOR panel banks by a lead plaintiff involved in exchange-traded derivatives and members of the Japanese Bankers Association’s Euroyen Tokyo Interbank Offered Rate (Euroyen TIBOR) panel. The complaint alleges, among other things, manipulation of the Euroyen TIBOR and Yen LIBOR rates and breaches of the CEA and the Antitrust Act. In 2014, the court dismissed the plaintiff’s antitrust claims, and, in 2020, the court dismissed the plaintiff’s remaining CEA claims. In 2015, a second putative class action, making similar allegations to the above class action, was filed in the SDNY against Barclays PLC, Barclays Bank PLC and BCI. Barclays and the plaintiffs reached a settlement of $17.75m for both actions, which received final court approval in March 2023. This matter is now concluded. ICE LIBOR civil action In August 2020, an action related to the LIBOR benchmark administered by the Intercontinental Exchange Inc. and certain of its affiliates (ICE) was filed by a group of individual plaintiffs in the US District Court for the Northern District of California on behalf of Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 471 Notes to the financial statements (continued) Accruals, provisions, contingent liabilities and legal proceedings individual borrowers and consumers of loans and credit cards with variable interest rates linked to USD ICE LIBOR. The plaintiffs’ motion seeking, among other things, preliminary and permanent injunctions to enjoin the defendants from continuing to set LIBOR or enforce any financial instrument that relies in whole or in part on USD LIBOR was denied. The defendants’ motion to dismiss the case was granted in September 2022. The plaintiffs filed an amended complaint, which was dismissed in October 2023. The plaintiffs are appealing the dismissal. Non-US benchmarks civil actions There remains one claim, issued in 2017, against Barclays Bank PLC and other banks in the UK in connection with alleged manipulation of LIBOR. Proceedings have also been brought in a number of other jurisdictions in Europe, Argentina and Israel relating to alleged manipulation of LIBOR and EURIBOR. Additional proceedings in other jurisdictions may be brought in the future. Foreign Exchange investigations and related civil actions The Group has been the subject of investigations in various jurisdictions in relation to certain sales and trading practices in the Foreign Exchange market. Settlements were reached in various jurisdictions in connection with these investigations, including the EU and US. The financial impact of any remaining ongoing investigations is not expected to be material to the Group’s operating results, cash flows or financial position. Various individuals and corporates in a range of jurisdictions have threatened or brought civil actions against the Group and other banks in relation to alleged manipulation of Foreign Exchange markets. US FX opt out civil action In 2018, Barclays Bank PLC and BCI settled a consolidated action filed in the SDNY, alleging manipulation of Foreign Exchange markets (Consolidated FX Action), for a total amount of $384m. Also in 2018, a group of plaintiffs, who opted out of the Consolidated FX Action, filed a complaint in the SDNY against Barclays PLC, Barclays Bank PLC, BCI and other defendants. Some of the plaintiffs’ claims were dismissed in 2020. Barclays PLC, Barclays Bank PLC, and BCI have reached a settlement of all claims against them in the matter. A settlement payment was made in April 2023 and the matter is now concluded. The financial impact of this settlement is not material to the Group’s operating results, cash flows or financial position. US retail basis civil action In 2015, a putative class action was filed against several international banks, including Barclays PLC and BCI, on behalf of a proposed class of individuals who exchanged currencies on a retail basis at bank branches (Retail Basis Claims). The SDNY has ruled that the Retail Basis Claims are not covered by the settlement agreement in the Consolidated FX Action. The Court subsequently dismissed all Retail Basis Claims against the Group and all other defendants. The plaintiffs filed an amended complaint. The defendants’ motion for summary judgment was granted in March 2023, dismissing the plaintiffs’ remaining claims. The plaintiffs have appealed the decision. Non-US FX civil actions Legal proceedings have been brought or are threatened against Barclays PLC, Barclays Bank PLC, BCI and Barclays Execution Services Limited (BX) in connection with alleged manipulation of Foreign Exchange in the UK, a number of other jurisdictions in Europe, Israel, Brazil and Australia. Additional proceedings may be brought in the future. The above-mentioned proceedings include two purported class actions filed against Barclays PLC, Barclays Bank PLC, BX, BCI and other financial institutions in the UK Competition Appeal Tribunal (CAT) in 2019. The CAT refused to certify these claims in the first quarter of 2022. In July 2023 (as amended in November 2023), the Court of Appeal overturned the CAT’s decision and found that the claims should be certified on an opt out basis. The Court of Appeal upheld the CAT’s determination as to which of the two purported class representatives should be chosen to bring the claim. Subject to any further appeal, only the claim brought by the chosen class representative will now proceed in the CAT. Also in 2019, a separate claim was filed in the UK in the High Court of Justice (High Court), and subsequently transferred to the CAT, by various banks and asset management firms against Barclays Bank PLC and other financial institutions alleging breaches of European and UK competition laws related to FX trading. This claim has been settled as part of the settlement payment referred to under the US FX opt out civil action above and the matter is now concluded. Metals-related civil actions A US civil complaint alleging manipulation of the price of silver in violation of the CEA, the Antitrust Act and state antitrust and consumer protection laws was brought by a proposed class of plaintiffs against a number of banks, including Barclays Bank PLC, BCI and BX, and transferred to the SDNY. The complaint was dismissed against these Barclays entities and certain other defendants in 2018, and against the remaining defendants in May 2023. The plaintiffs have appealed the dismissal of the complaint against all defendants. Civil actions have also been filed in Canadian courts against Barclays PLC, Barclays Bank PLC, Barclays Capital Canada Inc. and BCI on behalf of proposed classes of plaintiffs alleging manipulation of gold and silver prices. US residential mortgage related civil actions There are two US Residential Mortgage-Backed Securities (RMBS) related civil actions arising from unresolved repurchase requests submitted by Trustees for certain RMBS, alleging breaches of various loan-level representations and warranties (R&Ws) made by Barclays Bank PLC and/or a subsidiary acquired in 2007. In one action, the parties have agreed to settle the litigation. The financial impact of the settlement is not material to the Group’s operating results, cash flows or financial position. Barclays’ motion to dismiss the other repurchase action was denied in October 2023. Barclays is appealing the decision. Government and agency securities civil actions Treasury auction securities civil actions Consolidated putative class action complaints filed in US federal court against Barclays Bank PLC, BCI and other financial institutions under the Antitrust Act and state common law allege that the defendants (i) conspired to manipulate the US Treasury securities market and/or (ii) conspired to prevent the creation of certain platforms by boycotting or threatening to boycott such trading platforms. The court dismissed the consolidated action in March 2021.The plaintiffs filed an amended complaint. The defendants’ motion to dismiss Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 472 Notes to the financial statements (continued) Accruals, provisions, contingent liabilities and legal proceedings the amended complaint was granted in March 2022. The plaintiffs appealed this decision, and in February 2024 the appellate court affirmed the dismissal. In addition, certain plaintiffs have filed a related, direct action against BCI and certain other financial institutions, alleging that defendants conspired to fix and manipulate the US Treasury securities market in violation of the Antitrust Act, the CEA and state common law. This action remains stayed. Supranational, Sovereign and Agency bonds civil actions Civil antitrust actions have been filed in the SDNY and Federal Court of Canada in Toronto against Barclays Bank PLC, BCI, BX, Barclays Capital Securities Limited and, with respect to the civil action filed in Canada only, Barclays Capital Canada, Inc. and other financial institutions alleging that the defendants conspired to fix prices and restrain competition in the market for US dollar-denominated Supranational, Sovereign and Agency bonds. The SDNY actions were dismissed and these matters are now concluded. In the Federal Court of Canada action, the parties have reached a settlement in principle, which will require court approval. The financial impact of the settlement is not expected to be material to the Group’s operating results, cash flows or financial position. Variable Rate Demand Obligations civil actions Civil actions have been filed against Barclays Bank PLC and BCI and other financial institutions alleging the defendants conspired or colluded to artificially inflate interest rates set for Variable Rate Demand Obligations (VRDOs). VRDOs are municipal bonds with interest rates that reset on a periodic basis, most commonly weekly. Two actions in state court have been filed by private plaintiffs on behalf of the states of Illinois and California. Three putative class action complaints have been consolidated in the SDNY. In the consolidated SDNY class action, certain of the plaintiffs’ claims were dismissed in November 2020 and June 2022 and the plaintiffs’ motion for class certification was granted in September 2023, which means the case may proceed as a class action. The defendants are appealing this decision. In the California action, the California appeals court reversed the dismissal of the plaintiffs’ claims in April 2023. In the Illinois action, the defendants reached a settlement with the Attorney General for the State of Illinois to resolve the litigation. The court approved the settlement in October 2023 and dismissed the matter. The financial impact of the settlement is not material to the Group’s operating results, cash flows or financial position. This matter is now concluded. Odd-lot corporate bonds antitrust class action In 2020, BCI, together with other financial institutions, were named as defendants in a putative class action. The complaint alleges a conspiracy to boycott developing electronic trading platforms for odd-lots and price fixing. The plaintiffs demand unspecified money damages. The defendants’ motion to dismiss was granted in 2021 and the plaintiffs have appealed the dismissal. Credit Default Swap civil action A putative antitrust class action is pending in New Mexico federal court against Barclays Bank PLC, BCI and various other financial institutions. The plaintiffs, the New Mexico State Investment Council and certain New Mexico pension funds, allege that the defendants conspired to manipulate the benchmark price used to value Credit Default Swap (CDS) contracts at settlement (i.e. the CDS final auction price). The plaintiffs allege violations of US antitrust laws and the CEA, and unjust enrichment under state law. The defendants’ motion to dismiss was denied in June 2023. Interest rate swap and credit default swap US civil actions Barclays PLC, Barclays Bank PLC and BCI, together with other financial institutions that act as market makers for interest rate swaps (IRS), are named as defendants in several antitrust actions, including one putative class action and individual actions brought by certain swap execution facilities, which are consolidated in the SDNY. The complaints allege the defendants conspired to prevent the development of exchanges for IRS and demand unspecified money damages. The plaintiffs’ motion for class certification was denied in December 2023, meaning the case cannot proceed as a class action. The plaintiffs have sought the court’s leave to appeal that decision. In 2017, Tera Group Inc. (Tera) filed a separate civil antitrust action in the SDNY claiming that certain conduct alleged in the IRS cases also caused Tera to suffer harm with respect to the Credit Default Swaps market. In 2019, the court dismissed Tera’s claims for unjust enrichment and tortious interference but denied motions to dismiss the antitrust claims. Tera filed an amended complaint in January 2020. Barclays’ motion to dismiss all claims was granted in August 2023. Tera has filed a Notice of Appeal. BDC Finance L.L.C. In 2008, BDC Finance L.L.C. (BDC) filed a complaint in the Supreme Court of the State of New York (NY Supreme Court), demanding damages of $298m, alleging that Barclays Bank PLC had breached a contract in connection with a portfolio of total return swaps governed by an ISDA Master Agreement (the Master Agreement). Following a trial, the court ruled in 2018 that Barclays Bank PLC was not a defaulting party, which was affirmed on appeal. In April 2021, the trial court entered judgment in favour of Barclays Bank PLC for $3.3m and as yet to be determined legal fees and costs. BDC appealed. In January 2022, the appellate court reversed the trial court’s summary judgment decision in favour of Barclays Bank PLC and remanded the case to the lower court for further proceedings. The parties filed cross-motions on the scope of trial. In January 2024, the court ruled in Barclays’ favour. BDC is appealing, and the trial is adjourned until the appeal is decided. In 2011, BDC’s investment advisor, BDCM Fund Adviser, LLC and its parent company, Black Diamond Capital Holdings, LLC, also sued Barclays Bank PLC and BCI in Connecticut State Court for unspecified damages allegedly resulting from Barclays Bank PLC’s conduct relating to the Master Agreement, asserting claims for violation of the Connecticut Unfair Trade Practices Act and tortious interference with business and prospective business relations. This case has been withdrawn. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 473 Notes to the financial statements (continued) Accruals, provisions, contingent liabilities and legal proceedings Civil actions in respect of the US Anti-Terrorism Act Eight civil actions, on behalf of more than 4,000 plaintiffs, were filed in US federal courts in the US District Court in the Eastern District of New York (EDNY) and SDNY against Barclays Bank PLC and a number of other banks. The complaints generally allege that Barclays Bank PLC and those banks engaged in a conspiracy to facilitate US dollar-denominated transactions for the Iranian Government and various Iranian banks, which in turn funded acts of terrorism that injured or killed the plaintiffs or the plaintiffs’ family members. The plaintiffs seek to recover damages for pain, suffering and mental anguish under the provisions of the US Anti-Terrorism Act, which allow for the trebling of any proven damages. The court granted the defendants’ motions to dismiss three out of the six actions in the EDNY. The plaintiffs appealed in one action and the dismissal was affirmed, and judgment was entered, in January 2023. The court has given the plaintiffs until February 2024 to make a motion to vacate the judgment. The other two dismissed actions in the EDNY were consolidated into one action. The plaintiffs in that action, and in one other action in the EDNY, filed amended complaints in December 2023. The two other actions in the EDNY are currently stayed. Out of the two actions in the SDNY, the court granted the defendants’ motion to dismiss the first action. That action is stayed, and the second SDNY action is stayed pending any appeal on the dismissal of the first. Shareholder derivative action In November 2020, a purported Barclays shareholder filed a putative derivative action in New York state court against BCI and a number of current and former members of the Board of Directors of Barclays PLC and senior executives or employees of the Group. The shareholder filed the claim on behalf of nominal defendant Barclays PLC, alleging that the individual defendants harmed the company through breaches of their duties, including under the Companies Act 2006. The plaintiff seeks damages on behalf of Barclays PLC for the losses that Barclays PLC allegedly suffered as a result of these alleged breaches. An amended complaint was filed in April 2021, which BCI and certain other defendants moved to dismiss. The motion to dismiss was granted in April 2022. The plaintiff appealed the decision, and the dismissal was unanimously affirmed in June 2023 by the First Judicial Department in New York. The plaintiff has sought leave to appeal the First Judicial Department’s decision to the New York Court of Appeals. Derivative transactions civil action In 2021, Vestia, a Dutch housing association, brought a claim against Barclays Bank PLC in the UK in the High Court in relation to a series of derivative transactions entered into with Barclays Bank PLC between 2008 and 2011, seeking damages of £329m. Barclays Bank PLC is defending the claim and has made a counterclaim. Skilled person review in relation to historic timeshare loans and associated matters Clydesdale Financial Services Limited (CFS), which trades as Barclays Partner Finance and houses Barclays’ point-of-sale finance business, was required by the FCA to undertake a skilled person review in 2020 following concerns about historic affordability assessments for certain loans to customers in connection with timeshare purchases. The skilled person review was concluded in 2021. CFS complied fully with the skilled person review requirements, including carrying out certain remediation measures. CFS was not required to conduct a full back book review. Instead, CFS reviewed limited historic lending to ascertain whether its practices caused customer harm and is remediating any examples of harm. This work was substantially completed during 2023, utilising provisions booked to account for any remediations. Motor finance commission arrangements In January 2024, the FCA announced that it was appointing a skilled person to undertake a review of the historical use of discretionary commission arrangements and sales in the motor finance market across several firms. This follows two final decisions by the UK Financial Ombudsman Service (FOS), including one upholding a complaint against CFS in relation to commission arrangements and disclosure in the sale of motor finance products and a number of complaints and court claims, including some against CFS. Barclays will co-operate fully with the FCA’s skilled person review, the outcome of which is unknown, including any potential financial impact. The FCA plans to set out next steps on this matter by the end of September 2024. Barclays ceased operating in the motor finance market in late 2019. Over-issuance of securities in the US In March 2022, executive management became aware that Barclays Bank PLC had issued securities materially in excess of the set amount under its US shelf registration statements. As a result, Barclays Bank PLC commenced a rescission offer on 1 August 2022, by which Barclays Bank PLC offered to repurchase relevant affected securities from certain holders, which expired on 12 September 2022. Further, in September 2022, the SEC announced the resolution of its investigation of Barclays PLC and Barclays Bank PLC relating to such over-issuance of securities. In September 2022, a purported class action claim was filed in the US District Court in Manhattan seeking to hold Barclays PLC, Barclays Bank PLC and former and current executives responsible for declines in the price of Barclays PLC’s American depositary receipts, which the plaintiffs claim occurred as a result of alleged misstatements and omissions in its public disclosures. The defendants have moved to dismiss the case. In addition, holders of a series of ETNs have brought claims against Barclays PLC, Barclays Bank PLC, and former and current executives and board members in the US alleging, among other things, that Barclays’ failure to disclose that these ETNs were unregistered securities misled investors and that, as a result, Barclays is liable for the holders’ alleged losses following the suspension of further sales and issuances of such series of ETNs. Two such actions are purported class actions that have been consolidated into a single action in federal court in New York. Barclays has moved to dismiss the complaint. Any liabilities, claims or actions in connection with the over-issuance of securities under Barclays Bank PLC’s US shelf registration statements could have an adverse effect on the Group’s business, financial condition, results of operations and reputation as a frequent issuer in the securities markets. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 474 Notes to the financial statements (continued) Accruals, provisions, contingent liabilities and legal proceedings 2. Barclays PLC, Barclays Bank PLC and Barclays Bank UK PLC HM Revenue & Customs (HMRC) assessments concerning UK Value Added Tax In 2018, HMRC issued notices that have the effect of either removing certain Barclays overseas subsidiaries that have operations in the UK from Barclays’ UK VAT group or preventing them from joining it. Supplies between members of a UK VAT group are generally free from VAT. The notices had both retrospective and prospective effect. Barclays has appealed HMRC’s decisions to the First Tier Tribunal (Tax Chamber) in relation to both the retrospective VAT assessments and the on-going VAT payments made since 2018. £181m of VAT (inclusive of interest) was assessed retrospectively by HMRC covering the periods 2014 to 2018, of which approximately £128m is expected to be attributed to Barclays Bank UK PLC and £53m to Barclays Bank PLC. This retrospectively assessed VAT was paid in 2018 and an asset, adjusted to reflect expected eventual recovery, is recognised. Since 2018 Barclays has paid, and recognised as an expense, VAT on intra-group supplies from the relevant subsidiaries to the members of the VAT group. FCA investigation into transaction monitoring The FCA has been investigating Barclays’ compliance with UK money laundering regulations and the FCA’s rules and Principles for Businesses in an enforcement investigation which is focused on aspects of Barclays’ transaction monitoring in relation to certain business lines now in Barclays Bank UK PLC. The FCA has informed Barclays that it is closing the enforcement investigation into this matter. 3. Barclays PLC Civil action in respect of Barclays’ statements regarding the relationship between its former CEO and Jeffrey Epstein In November 2023, a purported class action was filed in federal court in California against Barclays PLC and a number of current and former members of the Board of Directors of Barclays PLC. The complaint seeks to hold the defendants responsible for declines in the price of Barclays PLC’s American depositary receipts, which the plaintiffs claim occurred as a result of alleged misstatements and omissions in Barclays’ public disclosures relating to its former CEO’s relationship with Jeffrey Epstein. Alternative trading systems In 2020, a claim was brought against Barclays PLC in the UK in the High Court by various shareholders regarding Barclays PLC’s share price based on the allegations contained within a complaint by the New York State Attorney General (NYAG) in 2014. Such claim was settled in 2016, as previously disclosed. The more recent claim seeks unquantified damages and Barclays is defending the claim. The NYAG complaint was filed against Barclays PLC and BCI in the NY Supreme Court alleging, among other things, that Barclays PLC and BCI engaged in fraud and deceptive practices in connection with LX, BCI’s SEC-registered alternative trading system. General The Group is engaged in various other legal, competition and regulatory matters in the UK, the US and a number of other overseas jurisdictions. It is subject to legal proceedings brought by and against the Group which arise in the ordinary course of business from time to time, including (but not limited to) disputes in relation to contracts, securities, guarantees, debt collection, consumer credit, fraud, trusts, client assets, competition, data management and protection, intellectual property, money laundering, financial crime, employment, environmental and other statutory and common law issues. The Group is also subject to enquiries and examinations, requests for information, audits, investigations and legal and other proceedings by regulators, governmental and other public bodies in connection with (but not limited to) consumer protection measures, measures to combat money laundering and financial crime, compliance with legislation and regulation, wholesale trading activity and other areas of banking and business activities in which the Group is or has been engaged. The Group is cooperating with the relevant authorities and keeping all relevant agencies briefed as appropriate in relation to these matters and others described in this note on an ongoing basis. At the present time, Barclays PLC does not expect the ultimate resolution of any of these other matters to have a material adverse effect on the Group’s financial position. However, in light of the uncertainties involved in such matters and the matters specifically described in this note, there can be no assurance that the outcome of a particular matter or matters (including formerly active matters or those matters arising after the date of this note) will not be material to Barclays PLC’s results, operations or cash flows for a particular period, depending on, among other things, the amount of the loss resulting from the matter(s) and the amount of profit otherwise reported for the reporting period. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 475 Notes to the financial statements (continued) Capital instruments, equity and reserves Capital instruments, equity and reserves The notes included in this section focus on the Group’s loan capital and shareholders’ equity including issued share capital, retained earnings, other equity balances and interests of minority shareholders in our subsidiary entities (non-controlling interests). For more information on capital management and how the Group maintains sufficient capital to meet our regulatory requirements refer to the Capital risk management section. 26 Subordinated liabilities Accounting for subordinated liabilities Subordinated liabilities are measured at amortised cost using the effective interest method under IFRS 9. As at 1 January Issuances Redemptions Other As at 31 December 2023 £m 11,423 1,523 (2,239) (213) 10,494 2022 £m 12,759 1,477 (2,679) (134) 11,423 Issuances of £1,523m comprise £1,180m USD 7.119% Fixed-to-Floating Rate Subordinated Callable Notes, issued externally by Barclays PLC, £315m USD Floating Rate Notes, and £28m JPY Floating Rate Notes issued externally by Barclays subsidiaries. Redemptions of £2,239m comprise £1,345m EUR 2% Fixed Rate Subordinated Notes and £599m partial repurchase of USD 4.375% Fixed Rate Subordinated Notes issued externally by Barclays PLC, £194m USD Floating Rate Notes and £28m JPY Floating Rate Notes issued externally by Barclays subsidiaries, £43m EUR Subordinated Floating Rate Notes and £30m USD Junior Undated Floating Rate Notes issued externally by Barclays Bank PLC. Other movements predominantly comprise foreign exchange movements and fair value hedge adjustments. Subordinated liabilities include accrued interest and comprise undated and dated subordinated liabilities as follows: Undated subordinated liabilities Dated subordinated liabilities Total subordinated liabilities None of the Group’s subordinated liabilities are secured. Undated subordinated liabilities1 Barclays Bank PLC issued Undated Notes Junior Undated Floating Rate Notes (USD 38m) Total undated subordinated liabilities Note 1 Instrument values are disclosed to the nearest million. 2023 £m — 10,494 10,494 2023 £m — — 2022 £m 28 11,395 11,423 2022 £m 28 28 Initial call date Any interest payment date Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 476 Notes to the financial statements (continued) Capital instruments, equity and reserves Dated subordinated liabilities1 Barclays PLC issued 2% Fixed Rate Subordinated Callable Notes (EUR 1,500m) 4.375% Fixed Rate Subordinated Notes (USD 1,250m) 3.75% Fixed Rate Resetting Subordinated Callable Notes (GBP 500m) 3.75% Fixed Rate Resetting Subordinated Callable Notes (SGD 200m) 5.20% Fixed Rate Subordinated Notes (USD 2,050m) 1.125% Fixed Rate Resetting Subordinated Callable Notes (EUR 1,000m) 4.836% Fixed Rate Subordinated Callable Notes (USD 2,000m) 8.407% Fixed Rate Resetting Subordinated Callable Notes (GBP 1,000m) 5.088% Fixed-to-Floating Rate Subordinated Callable Notes (USD 1,500m) 3.564% Fixed Rate Resetting Subordinated Callable Notes (USD 1,000m) 7.119% Fixed-to-Floating Rate Subordinated Callable Notes (USD 1,500m) 3.811% Fixed Rate Resetting Subordinated Callable Notes (USD 1,000m) Barclays Bank PLC issued Subordinated Floating Rate Notes (EUR 50m) 5.75% Fixed Rate Subordinated Notes 5.4% Reverse Dual Currency Subordinated Loan (JPY 15,000m) 6.33% Subordinated Notes Subordinated Floating Rate Notes (EUR 68m) External issuances by other subsidiaries Total dated subordinated liabilities Note 1 Instrument values are disclosed to the nearest million. Dated subordinated liabilities Initial call date Maturity date 2023 2025 2025 2026 2027 2027 2029 2030 2033 2041 2028 2024 2030 2030 2026 2031 2028 2032 2030 2035 2034 2042 2023 2026 2027 2032 2040 2033 2023 £m — 380 466 117 1,529 817 1,499 1,033 1,078 654 1,175 623 — 286 84 45 59 649 2022 £m 1,345 1,013 445 120 1,588 795 1,554 1,013 1,117 664 — 646 44 280 93 46 60 572 10,494 11,395 Dated subordinated liabilities are issued by Barclays PLC, Barclays Bank PLC and its subsidiaries for the development and expansion of their businesses and to strengthen their respective capital bases. The principal terms of the dated subordinated liabilities are described below: Subordination Dated subordinated liabilities issued by Barclays PLC ranks behind the claims against Barclays PLC of unsecured unsubordinated creditors but before the claims of the holders of its equity. All dated subordinated liabilities externally issued by Barclays Bank PLC rank behind the claims against Barclays Bank PLC of depositors and other unsecured unsubordinated creditors but before the claims of the holders of its equity. The dated subordinated liabilities externally issued by other subsidiaries are similarly subordinated as the external subordinated liabilities issued by Barclays Bank PLC. Interest Interest on the Floating Rate Notes is fixed periodically in advance, based on the related market rates. Interest on Fixed Rate Notes is set by reference to market rates at the time of issuance and fixed until maturity. Interest on the 4.836% USD Fixed Rate Subordinated Callable Notes, 3.75% SGD Fixed Rate Resetting Subordinated Callable Notes, 3.75% GBP Fixed Rate Resetting Subordinated Callable Notes, 3.811% USD Fixed Rate Resetting Subordinated Callable notes, 1.125% EUR Fixed Rate Resetting Subordinated Callable Notes, 3.564% USD Fixed Rate Resetting Subordinated Callable Notes, and the 8.407% GBP Fixed Rate Resetting Subordinated Callable Notes are fixed until the call date. After the respective call dates, in the event that they are not redeemed, the interest rates will be reset and fixed until maturity based on a market rate. Interest on the 5.088% USD Fixed-to-Floating Rate Subordinated Callable Notes and 7.119% USD Fixed-to-Floating Rate Subordinated Callable Notes are fixed until the call date. After the call date, in the event that they are not redeemed, the interest rate will reset periodically in advance based on market rates. Repayment Those subordinated liabilities with a call date are repayable at the option of the issuer on such call date in accordance with the conditions governing the respective debt obligations, some in whole or in part, and some only in whole. The remaining dated subordinated liabilities outstanding at 31 December 2023 are redeemable only on maturity, subject in particular cases to provisions allowing an early redemption in the event of certain changes in tax law, or to certain changes in legislation or regulations. Any repayments prior to maturity require, in the case of Barclays PLC and Barclays Bank PLC, the prior consent of the PRA, or in the case of the overseas issues, the approval of the local regulator for that jurisdiction and of the PRA in certain circumstances. There are no committed facilities in existence at the balance sheet date which permit the refinancing of debt beyond the date of maturity. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 477 Notes to the financial statements (continued) Capital instruments, equity and reserves 27 Ordinary shares, share premium, and other equity Called up share capital, allotted and fully paid As at 1 January 2023 Issued to staff under share incentive plans AT1 securities issuance AT1 securities redemption Repurchase of shares Other movements As at 31 December 2023 As at 1 January 2022 Issued to staff under share incentive plans AT1 securities issuance AT1 securities redemption Repurchase of shares Other movements As at 31 December 2022 Called up share capital Number of shares Ordinary share capital Ordinary share premium Total share capital and share premium Other equity instruments m 15,871 121 — — (837) — 15,155 £m 3,968 30 — — (209) — 3,789 16,752 4,188 50 — — (931) — 15,871 13 — — (233) — 3,968 £m 405 94 — — — — 499 348 57 — — — — 405 £m 4,373 124 — — (209) — 4,288 4,536 70 — — (233) — 4,373 £m 13,284 — 3,140 (3,170) — 5 13,259 12,259 — 3,158 (2,126) — (7) 13,284 Called up share capital comprises 15,155m (2022: 15,871m) ordinary shares of 25p each. Share repurchase At the 2023 AGM on 3 May 2023, Barclays PLC was authorised to repurchase up to an aggregate of 1,587m of its ordinary shares of 25p. The authorisation is effective until the AGM in 2024 or the close of business on 30 June 2024, whichever is the earlier. During 2023, 837m shares were repurchased with a total nominal value of £209m (2022: 931m shares with a nominal value of £233m). Other equity instruments Other equity instruments of £13,259m (2022: £13,284m) include AT1 securities issued by Barclays PLC. The AT1 securities are perpetual securities with no fixed maturity and are structured to qualify as AT1 instruments under prevailing capital rules applicable as at the relevant issue date. In 2023, there were three issuances of AT1 instruments, in the form of Fixed Rate Resetting Perpetual Subordinated Contingent Convertible Securities, for £3,140m (2022: three issuances for £3,158m) which includes issuance costs of £10m (2022: £9m). There were two redemptions in 2023 totalling £3,170m (2022: two redemptions totalling £2,126m). AT1 equity instruments AT1 equity instruments - Barclays PLC 1 7.25% Perpetual Subordinated Contingent Convertible Securities 7.75% Perpetual Subordinated Contingent Convertible Securities (USD 2,500m) 1 5.875% Perpetual Subordinated Contingent Convertible Securities 8% Perpetual Subordinated Contingent Convertible Securities (USD 2,000m) 1 7.125% Perpetual Subordinated Contingent Convertible Securities 6.375% Perpetual Subordinated Contingent Convertible Securities 6.125% Perpetual Subordinated Contingent Convertible Securities (USD 1,500m) 8.300% Perpetual Subordinated Contingent Convertible Securities (SGD 450m) 8.875% Perpetual Subordinated Contingent Convertible Securities 1 4.375% Perpetual Subordinated Contingent Convertible Securities (USD 1,500m) 9.250% Perpetual Subordinated Contingent Convertible Securities 7.300% Perpetual Subordinated Contingent Convertible Securities (SGD 400m) 1 8.000% Perpetual Subordinated Contingent Convertible Securities (USD 2,000m) 9.625% Perpetual Subordinated Contingent Convertible Securities (USD 1,750m) Total AT1 equity instruments Note 1 Reported net of securities held by the Group. Initial call date 2023 2023 2024 2024 2025 2025 2025 2027 2027 2028 2028 2028 2029 2029 2023 £m — — 1,241 1,509 996 996 1,142 264 1,247 1,077 1,497 248 1,647 1,395 13,259 2022 £m 1,243 1,925 1,244 1,509 993 996 1,142 264 1,247 1,078 — — 1,643 — 13,284 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 478 Notes to the financial statements (continued) Capital instruments, equity and reserves The principal terms of the AT1 securities are described below: ▪ AT1 securities rank behind the claims against Barclays PLC of i) unsubordinated creditors; ii) claims which are expressed to be subordinated to the claims of unsubordinated creditors of Barclays PLC but not further or otherwise; or iii) claims which are, or are expressed to be, junior to the claims of other creditors of Barclays PLC, whether subordinated or unsubordinated, other than claims which rank, or are expressed to rank, pari passu with, or junior to, the claims of holders of the AT1 securities. ▪ AT1 securities are undated and are redeemable, at the option of Barclays PLC, in whole on (i) the initial reset date, or on any fifth anniversary after the initial reset date or (ii) any day falling in a named period ending on the initial reset date, or on any fifth anniversary after the initial reset date. In addition, the AT1 securities are redeemable, at the option of Barclays PLC, in whole in the event of certain changes in the tax or regulatory treatment of the securities. Any redemptions require the prior consent of the PRA. ▪ Interest on the AT1 securities will be due and payable only at the sole discretion of Barclays PLC, and Barclays PLC has sole and absolute discretion at all times and for any reason to cancel (in whole or in part) any interest payment that would otherwise be payable on any interest payment date. 28 Reserves Currency translation reserve The currency translation reserve represents the cumulative gains and losses on the retranslation of the Group’s net investment in foreign operations, net of the effects of hedging. Fair value through other comprehensive income reserve The fair value through other comprehensive income reserve represents the changes in the fair value of financial instruments accounted for at fair value through other comprehensive income investments since initial recognition. Cash flow hedging reserve The cash flow hedging reserve represents the cumulative gains and losses on effective cash flow hedging instruments that will be recycled to profit or loss when the hedged transactions affect profit or loss. Own credit reserve The own credit reserve reflects the cumulative own credit gains and losses on financial liabilities at fair value. Amounts in the own credit reserve are not recycled to profit or loss in future periods. Other reserves and treasury shares Other reserves relate to redeemed ordinary and preference shares issued by the Group. Treasury shares relate to Barclays PLC shares held in relation to the Group’s various share schemes. These schemes are described in Note 31. Treasury shares are deducted from shareholders’ equity within other reserves. A transfer is made to retained earnings in line with the vesting of treasury shares held for the purposes of share-based payments. Currency translation reserve Fair value through other comprehensive income reserve Cash flow hedging reserve Own credit reserve Other reserves and treasury shares Total 2023 £m 3,671 (1,366) (3,707) (240) 1,565 (77) 2022 £m 4,772 (1,560) (7,235) 467 1,364 (2,192) Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 479 Notes to the financial statements (continued) Capital instruments, equity and reserves 29 Non-controlling interests Barclays Bank PLC issued: – Preference shares – Upper Tier 2 instruments Other non-controlling interests Total Profit attributable to non-controlling interest Equity attributable to non-controlling interest Dividends paid to non-controlling interest 2023 £m 40 24 — 64 2022 £m 31 14 — 45 2023 £m 529 126 5 660 2022 £m 529 438 1 968 2023 £m 40 24 — 64 2022 £m 31 14 — 45 In 2023, there were no issuances (2022: none) and three redemptions of £312m (2022: £20m) relating to the Undated Floating Rate Primary Capital Notes Series 1 (£93m) and Series 2 (£179m) and 9% Permanent Interest Bearing Capital Bonds (£40m) Barclays Bank PLC and protective rights of non-controlling interests Barclays PLC holds 100% of the voting rights of Barclays Bank PLC. As at 31 December 2023, Barclays Bank PLC has in issue preference shares and Upper Tier 2 instruments. These are non-controlling interests to the Group. A fixed coupon rate is attached to all Upper Tier 2 instruments until the initial call date. After the initial call date, in the event they are not redeemed, coupon payments in relation to the 6.125% Undated Notes are fixed periodically in advance for five-year periods based on market rates. Coupon payments for all other Upper Tier 2 instruments are at rates fixed periodically in advance based on market rates. The payment of preference share dividends and Upper Tier 2 coupons are typically at the discretion of Barclays Bank PLC, except for coupon payments that become compulsory where Barclays PLC has declared or paid a dividend on ordinary shares, or in certain cases, any class of preference shares, in the preceding six-month period. Coupons not paid become payable in each case if such a dividend is subsequently paid or in certain other circumstances. No dividend or coupon payments may be made unless Barclays Bank PLC satisfies a specified solvency test. Under the terms of these instruments, Barclays PLC may not pay dividends on ordinary shares until a dividend or coupon is next paid on these instruments or the instruments are redeemed or purchased by Barclays Bank PLC. There are no restrictions on Barclays Bank PLC’s ability to remit capital to the Parent as a result of these issued instruments. Preference share redemptions are typically at the discretion of Barclays Bank PLC and are redeemable in whole, but not in part, at the initial call date and on any dividend payment date after the initial call date, pursuant to their respective terms. Upper Tier 2 instruments are repayable, at the option of Barclays Bank PLC in whole at the initial call date and on any fifth anniversary after the initial call date. In addition, each issue of Upper Tier 2 instruments is repayable, at the option of Barclays Bank PLC, in whole for certain tax reasons, either at any time, or on an interest payment date. There are no events of default except non-payment of principal or mandatory interest. Any repayments or redemptions require the prior consent of the PRA, and in respect of the preference shares, any such redemption will be subject to the Companies Act 2006 and the Articles of Barclays Bank PLC. Instrument Preference Shares: US Dollar Preference Shares Euro Preference Shares Total Barclays Bank PLC Preference Shares Upper Tier 2 Instruments: Undated Floating Rate Primary Capital Notes Series 1 Undated Floating Rate Primary Capital Notes Series 2 5.03% Undated Reverse Dual Currency Subordinated Loan (JPY8bn) 5.0% Reverse Dual Currency Undated Subordinated Loan (JPY12bn) 9% Permanent Interest Bearing Capital Bonds (£100m) 6.125% Undated Subordinated Notes (£550m) Total Upper Tier 2 Instruments 2023 £m 318 211 529 — — 39 53 — 34 126 2022 £m 318 211 529 93 179 39 53 40 34 438 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 480 Notes to the financial statements (continued) Employee benefits Employee benefits The notes included in this section focus on the costs and commitments associated with employing our staff. 30 Staff costs Accounting for staff costs Deferred cash and share awards are made to employees to incentivise performance over the period employees provide services. To receive payment under an award, employees must provide service over the vesting period. The period over which the expense for deferred cash and share awards is recognised is based upon the period employees consider their services contribute to the awards. For past awards, the Group considers that it is appropriate to recognise the awards over the period from the date of grant to the date that the awards vest. In relation to awards granted from 2017, the Group, taking into account the changing employee understanding surrounding those awards, considered it appropriate for expense to be recognised over the vesting period including the financial year prior to the grant date. The accounting policies for share-based payments, and pensions and other post-retirement benefits are included in Note 31 and Note 32 respectively. Incentive awards granted: Current year bonus Deferred bonus Total incentive awards granted Reconciliation of incentive awards granted to income statement charge: Less: deferred bonuses granted but not charged in current year Add: current year charges for deferred bonuses from previous years Other differences between incentive awards granted and income statement charge Income statement charge for performance costs Other income statement charges: Salaries Social security costs 1 Post-retirement benefits Other compensation costs Total compensation costs2 Other resourcing costs: Outsourcing 3 Redundancy and restructuring Temporary staff costs Other Total other resourcing costs Total staff costs Notes 2023 £m 1,202 543 1,745 (384) 390 (1) 1,750 5,120 755 539 555 8,719 601 452 91 154 1,298 2022 £m 1,241 549 1,790 (388) 399 35 1,836 4,732 714 563 504 8,349 607 (7) 113 190 903 2021 £m 1,278 667 1,945 (457) 280 (23) 1,745 4,290 619 539 431 7,624 357 296 109 125 887 10,017 9,252 8,511 1 Post-retirement benefits charge includes £371m (2022: £313m; 2021: £289m) in respect of defined contribution schemes and £168m (2022: £250m; 2021: £250m) in respect of defined benefit schemes. 2 £860m (2022: £604m; 2021: £484m) of Group compensation cost was capitalised as internally generated software and excluded from the Staff cost disclosed above . 3 Redundancy and restructuring cost included £340m relating to structural cost actions taken in Q4 2023. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 481 Notes to the financial statements (continued) Employee benefits 31 Share-based payments Accounting for share-based payments Employee incentives include awards in the form of shares and share options, as well as offering employees the opportunity to purchase shares on favourable terms. The cost of the employee services received in respect of the shares or share options granted is recognised in the income statement over the period that employees provide services. The overall cost of the award is calculated using the number of shares and options expected to vest and the fair value of the shares or options at the date of grant. The number of shares and options expected to vest takes into account the likelihood that performance and service conditions included in the terms of the awards will be met. For other share-based payment schemes such as Sharesave and Sharepurchase, there are non- vesting conditions which must be met. Failure to meet the non-vesting condition is treated as a cancellation, resulting in an acceleration of recognition of the cost of the employee services. The fair value of shares is the market price ruling on the grant date, in some cases adjusted to reflect restrictions on transferability. The fair value of options granted is determined using the Black Scholes model to estimate the numbers of shares likely to vest. The model takes into account the exercise price of the option, the current share price, the risk-free interest rate, the expected volatility of the share price over the life of the option and other relevant factors. Market conditions that must be met in order for the award to vest are also reflected in the fair value of the award, as are any other non-vesting conditions – such as continuing to make payments into a share-based savings scheme. The charge for the year arising from share-based payment schemes was as follows: Deferred Share Value Plan and Share Value Plan Others Total equity settled Cash settled Total share-based payments The terms of the main current plans are as follows: Share Value Plan (SVP) Charge for the year 2023 £m 284 191 475 4 479 2022 £m 295 214 509 4 513 2021 £m 256 216 472 5 477 SVP awards have been granted to participants in the form of a conditional right to receive Barclays PLC shares or provisional allocations of Barclays PLC shares which vest or are considered for release over a period of three, four, five or seven years. Participants do not pay to receive an award or to receive a release of shares. For awards granted before December 2017, the grantor may also make a dividend equivalent payment to participants on release of a SVP award. SVP awards are also made to eligible employees for recruitment purposes. All awards are subject to potential forfeiture in certain leaver scenarios. Deferred Share Value Plan (DSVP) The terms of the DSVP are materially the same as the terms of the SVP as described above, save that Executive Directors are not eligible to participate in the DSVP and the DSVP operates over market purchase shares only. Other schemes In addition to the SVP and DSVP, the Barclays PLC Group operates a number of other schemes settled in Barclays PLC Shares including Sharesave (both UK and Ireland), Sharepurchase (both UK and overseas), and the Barclays PLC Group Long Term Incentive Plan. A delivery of upfront shares to ‘Material Risk Takers’ can be made as a Share Incentive Award (Holding Period) under the SVP. Share option and award plans The weighted average fair value per award granted, weighted average share price at the date of exercise/release of shares during the year, weighted average contractual remaining life and number of options and awards outstanding (including those exercisable) at the balance sheet date were as follows: 2023 2022 Weighted average fair value per award granted in year Weighted average share price at exercise/ release during year Weighted average remaining contractual life Number of options/ awards outstanding Weighted average fair value per award granted in year Weighted average share price at exercise/ release during year Weighted average remaining contractual life Number of options/ awards outstanding 1,2 DSVP and SVP 1 Others £ 1.49 1.68 0.31-1.69 1.43-1.69 £ in years (000s) £ £ in years (000s) 1 495,724 1.43 0-3 288,755 0.38-1.64 1.61 1 501,454 1.59-1.66 0-3 316,534 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 482 Notes to the financial statements (continued) Employee benefits SVP and DSVP are nil cost awards on which the performance conditions are substantially completed at the date of grant. Consequently, the fair value of these awards is based on the market value at that date. Sharesave has a contractual life of 3 years and 5 years, the expected volatility is 34.10% for 3 years and 33.12% for 5 years. The risk free interest rates used for valuations are 4.60% and 4.36% for 3 years and 5 years respectively. The pure dividend yield rates used for valuations are 5.27% and 5.02% for 3 years and 5 years respectively. The repo rates used for valuations are (0.50)% and (0.57)% for 3 years and 5 years respectively. The inputs into the model such as risk free interest rate, expected volatility, pure dividend yield rates and repo rates are derived from market data. Movements in options and awards The movement in the number of options and awards for the major schemes and the weighted average exercise price of options was: DSVP and SVP1,2 Number (000s) Others1,3 Number (000s) Weighted average ex. price (£) 2023 2022 2023 2022 Outstanding at beginning of year/acquisition date 501,454 Granted in the year Exercised/released in the year Less: forfeited in the year Less: expired in the year Outstanding at end of year Of which exercisable: Notes 232,479 (196,900) (41,309) — 495,724 — 413,859 291,876 (178,634) (25,647) — 501,454 — 316,534 198,386 (193,669) (29,424) (3,072) 288,755 67,967 335,976 146,203 (133,682) (28,789) (3,174) 316,534 34,247 2023 0.97 1.17 0.88 1.20 1.42 1.06 0.87 2022 0.95 1.33 1.15 1.01 1.23 0.97 1.19 1 Options/award granted over Barclays PLC shares. 2 Weighted average exercise price is not applicable for SVP and DSVP awards as these are not share option schemes. 3 The number of awards within Others at the end of the year principally relates to Sharesave (number of awards exercisable at end of year was 44,109,518). The weighted average exercise price relates to Sharesave. Awards and options granted under the Group’s share plans may be satisfied using new issue shares, treasury shares and market purchase shares. Awards granted under the DSVP may be satisfied using market purchase shares only. There were no significant modifications to the share-based payments arrangements in 2023 and 2022. As at 31 December 2023, the total liability arising from cash-settled share-based payments transactions was £5m (2022: £5m). Holdings of Barclays PLC shares and hedges Various employee benefit trusts established by the Group hold shares in Barclays PLC to meet obligations under the Barclays share- based payment schemes. The total number of Barclays shares held in these employee benefit trusts at 31 December 2023 was 19m (2022: 14m). Dividend rights have been waived on all these shares. The total market value of the shares held in trust based on the year end share price of £1.54 (2022: £1.59) was £29m (2022: £22m). For accounting of treasury shares, see Note 28. The Group has entered into physically settled forward contracts to hedge the settlement of certain share-based payment schemes. The fixed forward price to be paid under these contracts is £481m and has been recorded in retained earnings. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 483 Notes to the financial statements (continued) Employee benefits 32 Pensions and post-retirement benefits Accounting for pensions and post-retirement benefits The Group operates a number of pension schemes and post-employment benefit schemes. Defined contribution schemes – the Group recognises contributions due in respect of the accounting period in the income statement. Any contributions unpaid at the balance sheet date are included as a liability. Defined benefit schemes – the Group recognises its obligations to members of each scheme at the period end, less the fair value of the scheme assets after applying the asset ceiling test. Each scheme’s obligations are calculated using the projected unit credit method. Scheme assets are stated at fair value as at the period end. Changes in pension scheme liabilities or assets (remeasurements) that do not arise from regular pension cost, net interest on net defined benefit liabilities or assets, past service costs, settlements or contributions to the scheme, are recognised in other comprehensive income. Remeasurements comprise experience adjustments (differences between previous actuarial assumptions and what has actually occurred), the effects of changes in actuarial assumptions, return on scheme assets (excluding amounts included in the interest on the assets) and any changes in the effect of the asset ceiling restriction (excluding amounts included in the interest on the restriction). Post-employment benefit schemes – the cost of providing healthcare benefits to retired employees is accrued as a liability in the financial statements over the period that the employees provide services to the Group, using a methodology similar to that for defined benefit pension schemes. Pension schemes UK Retirement Fund (UKRF) The UKRF is the Group’s main scheme, representing 96% (2022: 96%) of the Group’s total retirement benefit obligations. Barclays Bank PLC is the principal employer of the UKRF. The UKRF was closed to new entrants on 1 October 2012, and comprises 10 sections, the two most significant of which are: ▪ Afterwork, which comprises a contributory cash balance defined benefit element, and a voluntary defined contribution element. The cash balance element is accrued each year and revalued until Normal Retirement Age in line with the increase in Retail Price Index (RPI) (up to a maximum of 5% p.a.). The main risks that Barclays runs in relation to Afterwork are limited although additional contributions are required if pre-retirement investment returns are not sufficient to provide for the benefits. ▪ The 1964 Pension Scheme. Most employees recruited before July 1997 built up benefits in this non-contributory defined benefit scheme in respect of service up to 31 March 2010. Pensions were calculated by reference to service and pensionable salary. From 1 April 2010, members became eligible to accrue future service benefits in either Afterwork or the Pension Investment Plan, a historic defined contribution section which is now closed to future contributions. The risks that Barclays runs in relation to the 1964 section are typical of final salary pension schemes, principally that investment returns fall short of expectations, that inflation exceeds expectations, and that retirees live longer than expected. Barclays Pension Savings Plan (BPSP) The BPSP is a defined contribution scheme providing benefits for all new UK hires from 1 October 2012. BPSP is not subject to the same investment return, inflation or life expectancy risks for Barclays that defined benefit schemes are. Members’ benefits reflect contributions paid and the level of investment returns achieved. Other Apart from the UKRF and the BPSP, Barclays operates a number of smaller pension and long-term employee benefits and post- retirement healthcare plans globally, the largest of which are the US defined benefit and defined contribution schemes. Many of the schemes are funded, with assets backing the obligations held in separate legal vehicles such as trusts. Others are operated on an unfunded basis. The benefits provided, the approach to funding, and the legal basis of the schemes, reflect local environments. Governance The UKRF operates under trust law and is managed and administered on behalf of the members in accordance with the terms of the Trust Deed and Rules and all relevant legislation. The Corporate Trustee is Barclays Pension Funds Trustees Limited, a private limited company and a wholly owned subsidiary of Barclays Bank PLC. The Trustee is the legal owner of the assets of the UKRF which are held separately from the assets of the Group. The Trustee Board comprises six Management Directors selected by Barclays, of whom three are independent Directors with no relationship with Barclays (and who are not members of the UKRF), plus three Member Nominated Directors selected from eligible active, deferred or pensioner members who apply for the role. The BPSP is a Group Personal Pension arrangement which operates as a collection of personal pension plans. Each personal pension plan is a direct contract between the employee and the BPSP provider (Legal & General Assurance Society Limited), and is regulated by the FCA. Similar principles of pension governance apply to the Group’s other pension schemes, depending on local legislation. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 484 Notes to the financial statements (continued) Employee benefits Amounts recognised The following tables include amounts recognised in the income statement and an analysis of benefit obligations and scheme assets for all Group defined benefit schemes. The net position is reconciled to the assets and liabilities recognised on the balance sheet. The tables include funded and unfunded post-retirement benefits. The income statement charge with respect to Defined contribution schemes is disclosed as part of footnotes to Note 30 Staff costs. Income statement (credit)/charge Current service cost Net finance (income)/cost Past service cost Other movements Total Balance sheet reconciliation Benefit obligation at beginning of the year Current service cost Interest costs on scheme liabilities Past service cost Remeasurement (loss)/gain – financial Remeasurement (loss)/gain – demographic Remeasurement (loss)/gain – experience Employee contributions Benefits paid Exchange and other movements Benefit obligation at end of the year Fair value of scheme assets at beginning of the year Interest income on scheme assets Employer contribution Remeasurement – return on scheme assets (less)/greater than discount rate Employee contributions Benefits paid Exchange and other movements Fair value of scheme assets at end of the year Net surplus Retirement benefit assets Retirement benefit liabilities Net retirement benefit assets 2023 £m 165 (222) — 3 (54) 2022 £m 227 (122) 20 3 128 2021 £m 247 (26) — 3 224 2023 2022 Of which relates to UKRF Total £m (20,881) (165) (959) — (708) 311 (264) (5) 1,115 43 (21,513) 25,360 1,181 54 (532) 5 (1,115) (39) 24,914 3,401 3,667 (266) 3,401 £m (19,990) (141) (929) — (683) 310 (260) (1) 1,075 1 (20,618) 24,680 1,155 39 (548) 1 (1,075) (18) 24,234 3,616 3,616 — 3,616 Of which relates to UKRF £m Total £m (31,899) (30,859) (227) (724) (20) (197) (707) (20) 10,995 10,734 268 (521) (4) 1,339 (88) (20,881) 35,467 846 1,808 270 (510) — 1,299 — (19,990) 34,678 829 1,785 (11,510) (11,313) 4 — (1,339) (1,299) 84 25,360 4,479 4,743 (264) 4,479 — 24,680 4,690 4,690 — 4,690 Included within the benefit obligation is £694m (2022: £690m) relating to overseas pensions and £201m (2022: £201m) relating to other post-employment benefits. As at 31 December 2023, the UKRF’s scheme assets were in surplus versus IAS 19 obligations by £3,616m (2022: £4,690m). The decrease in the UKRF surplus during the year was driven by lower corporate bond yields and the assets underperforming the discount rate. The weighted average duration of the benefit payments reflected in the defined benefit obligation for the UKRF is 12 years (2022: 13 years). The UKRF expected benefits promised to date are projected to be paid out for in excess of 50 years, although 30% of the benefits are expected to be paid in the next 10 years; 35% in years 11 to 20 and 20% in years 21 to 30. The remainder of the benefits are expected to be paid beyond 30 years. Of the £1,075m (2022: £1,299m) UKRF benefits paid out, £122m (2022: £390m) related to transfers out of the fund. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 485 Notes to the financial statements (continued) Employee benefits Where a scheme’s assets exceed its obligation, an asset is recognised to the extent that it does not exceed the present value of future contribution holidays or refunds of contributions (the asset ceiling). In the case of the UKRF the asset ceiling is not applied as, in certain specified circumstances such as wind-up, the Group expects to be able to recover any surplus. Similarly, a liability in respect of future minimum funding requirements is not recognised. The Trustee does not have a substantive right to augment benefits, nor do they have the right to wind up the plan except in the dissolution of the Group or termination of contributions by the Group. The application of the asset ceiling to other plans and recognition of additional liabilities in respect of future minimum funding requirements are considered on an individual plan basis. Critical accounting estimates and judgements Actuarial valuation of the scheme's obligation is dependent upon a series of assumptions. Below is a summary of the main financial and demographic assumptions adopted for the UKRF. Key UKRF financial assumptions Discount rate Inflation rate (RPI) 2023 % p.a. 4.49 3.17 2022 % p.a. 4.80 3.21 The UKRF discount rate assumption for 2023 was based on a standard WTW RATE Link model. The RPI inflation assumption for 2023 was set by reference to the Bank of England’s implied inflation curve. The inflation assumption incorporates a deduction of 20 basis points as an allowance for an inflation risk premium. The methodology used to derive the discount rate and inflation assumptions is consistent with that used at the prior year end. The UKRF’s post-retirement mortality assumptions are based on best estimates derived from an analysis in 2022 of the UKRF’s own post-retirement mortality experience and taking account of recent evidence from published mortality surveys. An allowance has been made for future mortality improvements based on the 2022 core projection model published by the Continuous Mortality Investigation Bureau subject to a long-term trend of 1.25% per annum in future improvements (2022: 1.25% per annum). The table below shows how the assumed life expectancy at 60, for members of the UKRF, has varied over the past three years: Assumed life expectancy Life expectancy at 60 for current pensioners (years) – Males – Females Life expectancy at 60 for future pensioners currently aged 40 (years) – Males – Females 2023 2022 2021 26.5 29.3 28.0 30.7 26.8 29.5 28.3 31.0 27.3 29.6 29.1 31.4 Through transactions in 2020 and 2022 approximately three-quarters of the longevity risk for current pensioners has been reinsured, and the transactions will provide income to the UKRF if pensions are paid out for longer than expected. The contracts form part of the UKRF’s investment portfolio. Sensitivity analysis on actuarial assumptions The sensitivity analysis has been calculated by valuing the UKRF liabilities using the amended assumptions shown in the table below and keeping the remaining assumptions the same as disclosed in the table above, except in the case of the inflation sensitivity where other assumptions that depend on assumed inflation have also been amended correspondingly. The difference between the recalculated liability figure and that stated in the balance sheet reconciliation table above is the figure shown. The selection of these movements to illustrate the sensitivity of the defined benefit obligation to key assumptions should not be interpreted as Barclays expressing any specific view of the probability of such movements happening. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 486 Notes to the financial statements (continued) Employee benefits Change in key assumptions Discount rate 0.5% p.a. increase 0.25% p.a. increase 0.25% p.a. decrease 0.5% p.a. decrease Assumed RPI 0.5% p.a. increase 0.25% p.a. increase 0.25% p.a. decrease 0.5% p.a. decrease Life expectancy at 60 One year increase One year decrease Assets 2023 2022 (Decrease)/ Increase in UKRF defined benefit obligation (Decrease)/ Increase in UKRF defined benefit obligation £bn £bn (1.2) (0.6) 0.6 1.3 0.8 0.4 (0.4) (0.8) 0.6 (0.6) (1.1) (0.6) 0.6 1.2 0.8 0.4 (0.4) (0.8) 0.6 (0.5) A long-term investment strategy has been set for the UKRF, with its asset allocation comprising a mixture of equities, bonds, property and other appropriate assets. This recognises that different asset classes are likely to produce different long-term returns and some asset classes may be more volatile than others. The long-term investment strategy ensures, among other aims, that investments are adequately diversified. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 487 Notes to the financial statements (continued) Employee benefits The value of the assets of the schemes and their percentage in relation to total scheme assets were as follows: Analysis of scheme assets Total Of which relates to UKRF As at 31 December 2023 Equities Private equities Bonds - fixed government Bonds - index-linked government Bonds - corporate and other Property Infrastructure Hedge funds Derivatives Longevity reinsurance contracts 2 Cash and liquid assets Mixed investment funds Other Fair value of scheme assets As at 31 December 2022 Equities Private equities Bonds - fixed government Bonds - index-linked government Bonds - corporate and other Property Infrastructure Hedge funds Derivatives Longevity reinsurance contract 2 Cash and liquid assets Mixed investment funds Other Fair value of scheme assets Notes — 9.3 5.3 38.8 29.1 4.9 6.3 5.4 (6.4) (0.5) 7.8 — — % of total fair value of scheme assets % Quoted £m Unquoted1 £m Value £m % of total fair value of scheme assets % Quoted £m Unquoted1 £m Value £m 116 — 1,544 9,400 6,014 17 814 11 25 — — 2,259 — — 1,237 1,197 720 1,309 116 2,259 1,544 9,400 7,251 1,214 1,534 1,320 (1,584) (1,559) (131) (131) 0.5 9.1 6.2 37.7 29.1 4.9 6.2 5.3 (6.3) (0.5) — — 1,289 9,383 5,818 — 814 — 25 — — 2,259 — — 1,237 1,197 720 1,309 — 2,259 1,289 9,383 7,055 1,197 1,534 1,309 (1,584) (1,559) (131) (131) (1,134) 3,036 1,902 7.6 (1,143) 3,036 1,893 12 5 — 47 12 52 — 0.2 — — — 5 — 5 16,824 8,090 24,914 100.0 16,186 8,048 24,234 100.0 113 — 1,353 9,847 5,884 13 793 11 — 2,734 — — 1,551 1,310 790 1,362 113 2,734 1,353 9,847 7,435 1,323 1,583 1,373 (20) (1,837) (1,857) — (123) (123) (1,776) 3,286 1,510 11 7 — 51 11 58 0.5 10.8 5.3 38.9 29.3 5.2 6.2 5.4 (7.3) (0.5) 6.0 — 0.2 — — 1,098 9,829 5,690 — 793 — — 2,734 — — 1,551 1,310 790 1,362 — 2,734 1,098 9,829 7,241 1,310 1,583 1,362 (20) (1,837) (1,857) — (123) (123) (1,789) 3,286 1,497 — — — 6 — 6 — 11.1 4.4 39.9 29.3 5.3 6.4 5.5 (7.5) (0.5) 6.1 — — 16,236 9,124 25,360 100.0 15,601 9,079 24,680 100.0 1 Valuation of unquoted assets is provided by the underlying managers or qualified independent valuers. The valuation for some of the unquoted assets, in particular private equities, is based on valuations as at 30 September 2023 adjusted by cash flows, these being the latest available valuations as at the point of publication. All valuations are determined in accordance with relevant industry guidance. Barclays does not believe these valuations will differ materially from the fair value, in the context of the overall UKRF asset size. 2 Cash and liquid assets for the UKRF consists of £354m (2022: £521m) Cash, £91m (2022: £80m) Receivables/payables, £3,036m (2022:£3,286m) Pooled cash funds and £(1,588)m (2022: £(2,390)m) Repurchase agreements. Included within the fair value of UKRF scheme assets was nil (2022: nil) relating to shares in Barclays PLC and nil (2022: nil) relating to bonds issued by Barclays PLC. The UKRF also invests in pooled investment vehicles which may hold shares or debt issued by Barclays PLC. During 2023, the Trustee undertook a review of the investment strategy to reflect updated liabilities and market assumptions. The Trustee agreed to continue their existing de-risking plan and make no fundamental changes to the investment strategy. At 31 December 2023, 39% of the UKRF assets were invested in liability-driven investment strategies; primarily UK gilts as well as interest rate and inflation swaps. These swaps are used to better match the assets to its liabilities. The swaps are used to reduce the scheme’s inflation and duration risks against its liabilities. The UKRF employs derivative instruments, where appropriate, to match assets more closely to liabilities, or to achieve a desired exposure or return. The value of assets shown reflects the assets held by the UKRF, with any derivative holdings reflected on a fair value basis. The UKRF uses repurchase agreements and reverse repurchase agreements to achieve the Trustee’s liability hedging objective. Investment managers are allowed to undertake repo transactions on the UKRF’s existing gilt holdings to raise cash with which to buy additional gilts for efficient portfolio management; and reverse repo transactions to receive gilts and be paid a fee for providing cash. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 488 Notes to the financial statements (continued) Employee benefits The UKRF has a comprehensive and robust liquidity framework in place. The aim of the liquidity framework is to ensure that pension payments and other liquidity outflows are paid in due course, sufficient liquidity and collateral is maintained to achieve strategic allocation targets and that all liquidity outflows/collateral needs are covered without forced sale or strategic asset allocation changes. The UKRF holds two longevity reinsurance contracts covering c75% of the current pensioner liabilities. The contracts provide income to the UKRF if pensions are paid out for longer than expected. At 31 December 2023, the combined value of the contracts was £(131)m (2022: £(123)m). The negative value reflects the estimated impact of changes in the reinsurance market, demographic assumptions and risk premia since the contracts were entered into by the UKRF. For information on the UKRF Trustee’s approach to Responsible Investment and Climate Risk, in the context of managing the UKRF, please refer to the UKRF Trustee website at http://epa.towerswatson.com/accounts/barclays/public/barclays-bank-responsible- investment-policy/. Triennial valuation The UKRF annual funding update as at 30 September 2023 showed a funding surplus of £2.03bn compared to £1.97bn at 30 September 2022 triennial actuarial valuation. The improvement was mainly due to asset returns outperforming the change in liabilities. The main differences between the funding and accounting assumptions are a different approach to setting the discount rate and a more conservative longevity assumption for funding. As part of the 2022 triennial valuation, the Trustee and Barclays Bank PLC agreed an annual adequacy test on a basis more prudent than the IAS 19 or funding bases. Should the UKRF be sufficiently funded on this basis, the regular employer contributions to the UKRF to fund future Afterwork accrual will not be required in the following calendar year. The test will be reviewed at the 2025 triennial valuation. The test was passed in September, so no regular employer contributions are required for 2024. The next funding valuation of the UKRF is due to be completed in 2026 with an effective date of 30 September 2025. Other support measures agreed which remain in place Collateral – Barclays Bank PLC has entered into an agreement with the UKRF Trustee to provide collateral to cover at least 100% of any funding deficit with an overall cap of £9bn, to provide security if the UKRF is in a funding deficit. The collateral pool is currently zero, reflecting the surplus funding position. The arrangement provides the UKRF Trustee with dedicated access to the pool of assets in the event of Barclays Bank PLC not paying any required deficit reduction contribution to the UKRF or in the event of Barclays Bank PLC’s insolvency. Participation – As permitted under the Financial Services and Markets Act 2000 (Banking Reform) (Pensions) Regulations 2016, Barclays Bank UK PLC is a participating employer in the UKRF and will remain so during a transitional phase until September 2025 as set out in a deed of participation. In the event of Barclays Bank PLC’s insolvency during this period provision has been made to require Barclays Bank UK PLC to become the principal employer of the UKRF. Barclays Bank PLC’s Section 75 debt would be triggered by the insolvency (the debt would be calculated after allowing for the payment to the UKRF of any collateral above). Defined benefit contributions paid with respect to the UKRF were as follows: Contributions paid 2023 2022 2021 £m 39 1,785 955 There were nil (2022: nil) Section 75 contributions included within the Group’s contributions paid as no participating employers left the UKRF in 2023. The Group’s expected contribution to the UKRF in respect of defined benefits in 2024 is £22m. In addition, the expected contributions to UK defined contribution schemes in 2024 is £32m to the UKRF and £293m to the BPSP. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 489 Notes to the financial statements (continued) Scope of consolidation Scope of consolidation The notes included in this section present information on the Group’s investments in subsidiaries, joint ventures and associates and its interests in structured entities. Detail is also given on securitisation transactions the Group has entered into and arrangements that are held off-balance sheet. 33 Principal subsidiaries The significant judgements used in applying this policy are set out below. Accounting for investment in subsidiaries In the individual financial statements of Barclays PLC, investments in subsidiaries are stated at cost less impairment. Principal subsidiaries for the Group are set out below. This includes those subsidiaries that are most significant in the context of the Group’s business, results or financial position. Company name Barclays Bank PLC Barclays Bank UK PLC Principal place of business or incorporation Nature of business United Kingdom United Kingdom Banking, holding company Banking, holding company Barclays Bank Ireland PLC Ireland Banking Barclays Execution Services Limited Barclays Capital Inc. Barclays Capital Securities Limited Barclays Securities Japan Limited Barclays US LLC Barclays Bank Delaware United Kingdom United States Service company Securities dealing United Kingdom Securities dealing Japan United States United States Securities dealing Holding company Credit card issuer Non-controlling interests - proportion of ownership interests Non-controlling interests - proportion of voting interests Percentage of voting rights held % 100 100 100 100 100 100 100 100 100 % 1 — — — — — — — — % — — — — — — — — — The country of registration or incorporation is also the principal area of operation of each of the above subsidiaries. Ownership interests are in some cases different to voting interests due to the existence of non-voting equity interests, such as preference shares. Refer to Note 29 for more information. Determining whether the Group has control of an entity is generally straightforward based on ownership of the majority of the voting capital. However, in certain instances, this determination will involve judgement, particularly in the case of structured entities where voting rights are often not the determining factor in decisions over the relevant activities. This judgement will involve assessing the purpose and design of the entity. It will also often be necessary to consider whether the Group, or another involved party with power over the relevant activities, is acting as a principal in its own right or as an agent on behalf of others.  There is also often considerable judgement involved in the ongoing assessment of control over structured entities. In this regard, where market conditions have deteriorated such that the other investors’ exposures to the structure’s variable returns have been substantively eliminated, the Group may conclude that the managers of the structured entity are acting as its agent and therefore will consolidate the structured entity. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 490 Notes to the financial statements (continued) Scope of consolidation An interest in equity voting rights exceeding 50% would typically indicate that the Group has control of an entity. However, the entity set out below is excluded from consolidation because the Group does not have exposure to its variable returns. Company name Palomino Limited Country of registration or incorporation Cayman Islands Percentage of voting rights held Equity shareholders' funds Retained profit for the year % 100 £m — £m — This entity is managed by an external counterparty and consequently is not controlled by the Group. Interests relating to this entity are included in Note 34. Significant restrictions As is typical for a group of its size and international scope, there are restrictions on the ability of Barclays PLC to obtain distributions of capital, access the assets or repay the liabilities of members of its Group due to the statutory, regulatory and contractual requirements of its subsidiaries and due to the protective rights of non-controlling interests. These are considered below. Regulatory requirements Barclays’ principal subsidiary companies have assets and liabilities before intercompany eliminations of £2,022bn (2022: £1,962bn) and £1,927bn (2022: £1,869bn) respectively. Certain of these assets and liabilities are subject to prudential regulation and regulatory capital requirements in the countries in which they are regulated. These require entities to maintain minimum capital levels which cannot be returned to the parent company, Barclays PLC, on a going concern basis. In order to meet capital requirements, subsidiaries may issue certain equity-accounted and debt-accounted financial instruments and non-equity instruments such as Tier 1 and Tier 2 capital instruments and other forms of subordinated liabilities. Refer to Note 26 and Note 27 for particulars of these instruments. These instruments may be subject to cancellation clauses or preference share restrictions that would limit the ability of the entity to repatriate the capital on a timely basis. Liquidity requirements Regulated subsidiaries of the Group are required to meet applicable PRA or local regulatory requirements pertaining to liquidity. The regulated subsidiaries include Barclays Bank PLC and Barclays Capital Securities Limited (which are regulated on a combined basis under a Domestic Liquidity Sub-Group (DoLSub) arrangement), Barclays Bank UK PLC, Barclays Bank Ireland PLC, Barclays Capital Inc. and Barclays Bank Delaware. Refer to the Liquidity risk section for further details of liquidity requirements, including those of the Group’s significant subsidiaries. Statutory requirements The Group’s subsidiaries are subject to statutory requirements not to make distributions of capital and unrealised profits and generally to maintain solvency. These requirements restrict the ability of subsidiaries to make remittances of dividends to Barclays PLC, the ultimate parent, except in the event of a legal capital reduction or liquidation. In most cases, the regulatory restrictions referred to above exceed the statutory restrictions. Asset encumbrance The Group uses its financial assets to raise finance in the form of securitisations and through the liquidity schemes of central banks, as well as to provide security to the UK Retirement Fund. Once encumbered, the assets are not available for transfer around the Group. The assets typically affected are disclosed in Note 37. Other restrictions The Group is required to maintain balances with central banks and other regulatory authorities, and these amounted to £3,758m (2022: £3,457m). Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 491 Notes to the financial statements (continued) Scope of consolidation 34 Structured entities A structured entity is an entity in which voting or similar rights are not the dominant factor in deciding who controls the entity. Voting rights may relate to administrative tasks only, with the relevant activities of the entity being directed by means of contractual arrangements. Structured entities are generally created to achieve a narrow and well-defined objective with restrictions around their ongoing activities. Depending on the Group’s power over the activities of the entity and its exposure to and ability to influence its own returns, it may consolidate the entity. In other cases, it may sponsor or have exposure to such an entity but not consolidate it. Consolidated structured entities The Group has contractual arrangements which may require it to provide financial support to the following types of consolidated structured entities: • Securitisation vehicles: The Group uses securitisation as a source of financing and a means of risk transfer. Where entities are controlled by the Group, they are consolidated. Refer to Note 36 for further detail. ▪ Commercial Paper (CP) conduits: These entities issue CP and use the proceeds to lend to clients as part of the Group's multi-seller conduit programme. The Group has provided £22.4bn (2022: £20.8bn) in contractual liquidity facilities to the CP conduits that the Group consolidates. These amounts represent the maximum the conduits can lend externally. The amounts of CP conduit lending (drawn and undrawn) to unconsolidated structured entities can be seen in Other interests in unconsolidated structured entities under multi-seller conduit programme in the Nature of interest table. ▪ Employee benefit trusts: The Group provides capital contributions to employee benefit trusts to enable them to meet obligations to employees in relation to share-based remuneration arrangements. ▪ Tender Option Bond (TOB) trusts: During 2023, the Group provided undrawn liquidity facilities of £3.7bn (2022: £3.8bn) to consolidated TOB trusts. These trusts invest in fixed income instruments issued by state, local or other municipalities in the United States, funded by long-term senior floating-rate notes and junior residual securities. Unconsolidated structured entities The term ‘unconsolidated structured entities’ refers to structured entities not controlled by Barclays, and are established either by Barclays or a third party. An interest in a structured entity is any form of contractual or non-contractual involvement which creates variability in returns arising from the performance of the entity for the Group. Such interests include holdings of debt or equity securities, derivatives that transfer financial risks from the entity to the Group, lending, loan commitments, financial guarantees and investment management agreements. The Group enters into transactions with unconsolidated structured entities in the normal course of business to facilitate customer transactions, to provide risk management services and for specific investment opportunities. This is predominantly within the CIB business. Structured entities may take the form of funds, trusts, securitisation vehicles, and private investment companies. The largest transactions for Barclays include loans and derivatives with hedge fund structures and special purpose entities, multi-seller conduit lending, holding notes issued by securitisation vehicles, and facilitating customer requirements through funds. The nature and extent of the Group’s interests in structured entities is summarised below: Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 492 Notes to the financial statements (continued) Scope of consolidation Summary of interests in unconsolidated structured entities As at 31 December 2023 Assets Trading portfolio assets Financial assets at fair value through the income statement Derivative financial instruments Financial assets at fair value through other comprehensive income Loans and advances at amortised cost Debt securities at amortised cost Reverse repurchase agreements and other similar secured lending Other assets Total assets Liabilities Derivative financial instruments As at 31 December 2022 Assets Trading portfolio assets Financial assets at fair value through the income statement Derivative financial instruments Financial assets at fair value through other comprehensive income Loans and advances at amortised cost Debt securities at amortised cost Reverse repurchase agreements and other similar secured lending Other assets Total assets Liabilities Secured financing interests Traded derivatives Other interests Short-term traded £m £m — 74,551 — — — — 896 — 15,482 — — — — — — — £m — — 5,685 — — — — — £m — 1,141 — 838 34,316 18,487 — 130 Total £m 15,482 75,692 5,685 838 34,316 18,487 896 130 75,447 15,482 5,685 54,912 151,526 — — 6,173 — 6,173 — 75,166 — — — — 117 — 8,632 — — — — — — — — — 4,555 — — — — — — 2,459 — 423 30,750 13,542 — 69 8,632 77,625 4,555 423 30,750 13,542 117 69 75,283 8,632 4,555 47,243 135,713 Derivative financial instruments — — 8,460 — 8,460 Secured financing arrangements, short-term traded interests and traded derivatives are typically managed under Market risk management policies described in the Market risk management section which includes an indication of the change of risk measures compared to last year. For this reason, the total assets of these entities are not considered meaningful for the purposes of understanding the related risks and so have not been presented. Other interests include conduits and lending where the interest is driven by normal customer demand. As at 31 December 2023, Barclays entered into transactions with approximately 6,000 (2022: 6,000) structured entities. Secured financing The Group routinely enters into reverse repurchase contracts, margin lending, stock borrowing and similar arrangements on normal commercial terms where the counterparty to the arrangement is a structured entity. Due to the nature of these arrangements, especially the transfer of collateral and ongoing margining, the Group is able to manage its variable exposure to the performance of the structured entity counterparty. The counterparties included in secured financing mainly include hedge fund limited structures, investment companies and special purpose entities. Short-term traded interests As part of its market making activities, the Group buys and sells interests in structured vehicles, which are predominantly debt securities issued by asset securitisation vehicles. Such interests are typically held individually or as part of a larger portfolio for no more than 90 days. In such cases, the Group typically has no other involvement with the structured entity other than the securities it holds as part of trading activities and its maximum exposure to loss is restricted to the carrying value of the asset. Traded derivatives The Group enters into a variety of derivative contracts with structured entities which reference market risk variables such as interest rates, equities, foreign exchange rates and credit indices among other things. The main derivative types which are considered interests in structured entities include equity options, index-based and entity-specific credit default swaps, and total return swaps. Interest rate swaps and foreign exchange derivatives that are not complex and which expose the Group to insignificant credit risk by being senior in Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 493 Notes to the financial statements (continued) Scope of consolidation the payment waterfall of a securitisation and derivatives that are determined to introduce risk or variability to a structured entity are not considered to be an interest in an entity and have been excluded from the disclosures. A description of the types of derivatives and the risk management practices are detailed in Note 14. The risk of loss may be mitigated through ongoing margining requirements as well as a right to cash flows from the structured entity which are senior in the payment waterfall. Such margining requirements are consistent with market practice for many derivative arrangements and in line with the Group’s normal credit policies. Derivative transactions require the counterparty to provide cash or other collateral under margining agreements to mitigate counterparty credit risk. The Group is mainly exposed to settlement risk on these derivatives which is mitigated through daily margining. Total notional contract amounts were £335,552m (2022: £244,780m). Except for credit default swaps where the maximum exposure to loss is the swap notional amount, it is not possible to estimate the maximum exposure to loss in respect of derivative positions as the fair value of derivatives is subject to changes in market rates of interest, exchange rates and credit indices which by their nature are uncertain. In addition, the Group’s losses would be subject to mitigating action under its traded market risk and credit risk policies that require the counterparty to provide collateral in cash or other assets in most cases. Other interests in unconsolidated structured entities The Group’s interests in structured entities not held for the purposes of short-term trading activities are set out below, summarised by the nature of the interest and limited to significant categories, based on maximum exposure to loss. Nature of interest As at 31 December 2023 Financial assets at fair value through the income statement Financial assets at fair value through other comprehensive income Loans and advances at amortised cost Debt securities at amortised cost Other assets Total on-balance sheet exposures Total off-balance sheet notional amounts Maximum exposure to loss Total assets of the entity As at 31 December 2022 Financial assets at fair value through the income statement Financial assets at fair value through other comprehensive income Loans and advances at amortised cost Debt securities at amortised cost Other assets Total on-balance sheet exposures Total off-balance sheet notional amounts Maximum exposure to loss Total assets of the entity Note Multi-seller conduit programme £m — — 8,903 — 38 8,941 11,947 20,888 35,439 — — 8,681 — 32 8,713 10,552 19,265 66,504 Other £m Total £m 1,103 1,141 Of which: Barclays owned, not consolidated entities1 £m 907 — — — — 907 — 907 838 34,316 18,487 130 54,912 24,547 79,459 309,509 8,704 200 — 18,487 4 19,794 — 19,794 108,751 Lending £m 38 638 25,413 — 88 26,177 12,600 38,777 165,319 59 2,400 2,459 2,284 220 22,069 — 33 22,381 10,926 33,307 160,002 203 — 13,542 4 16,149 — 16,149 88,779 423 30,750 13,542 69 47,243 21,478 68,721 315,285 — — — — 2,284 — 2,284 8,690 1 Comprises of Barclays owned, not consolidated structured entities per IFRS 10 Consolidated Financial Statements, and Barclays sponsored entities, Refer to Note 33 Principal subsidiaries for more details on consolidation. Maximum exposure to loss Unless specified otherwise below, the Group’s maximum exposure to loss is the total of its on-balance sheet positions and its off- balance sheet arrangements, being loan commitments and financial guarantees. Exposure to loss is mitigated through collateral, financial guarantees, the availability of netting and credit protection held. Multi-seller conduit programme Barclays' multi-seller conduit programme engages in providing financing to various clients and holds whole or partial interests in pools of receivables or similar obligations. These instruments are protected from loss through over-collateralisation, seller guarantees, or other credit enhancements provided to the conduit entities. The Group’s off-balance sheet exposure included in the table above represents liquidity facilities that are provided to the conduit for the benefit of the holders of the commercial paper issued by the conduit and will Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 494 Notes to the financial statements (continued) Scope of consolidation only be drawn where the conduit is unable to access the commercial paper market. If these liquidity facilities are drawn, the Group is protected from loss through over-collateralisation, seller guarantees, or other credit enhancements provided to the conduit. Lending The portfolio includes lending provided by the Group to unconsolidated structured entities in the normal course of its lending business to earn income in the form of interest and lending fees and includes loans to structured entities that are generally collateralised by property, equipment or other assets. All loans are subject to the Group’s credit sanctioning process. Collateral arrangements are specific to the circumstances of each loan with additional guarantees and collateral sought from the sponsor of the structured entity for certain arrangements. During the period the Group incurred immaterial impairment against such facilities. Other This includes fair value loans with structured entities where the market risk is materially hedged with corresponding derivative contracts, interests in debt securities issued by securitisation vehicles and drawn and undrawn loan facilities to these entities. In addition, other includes investment funds with interests restricted to management fees based on performance of the fund and trusts held on behalf of beneficiaries with interests restricted to unpaid fees. Assets transferred to sponsored unconsolidated structured entities Barclays is considered to sponsor another entity if: it had a key role in establishing that entity, it transferred assets to the entity, the Barclays name appears in the name of the entity or it provides guarantees on the entity’s performance. As at 31 December 2023, assets transferred to sponsored unconsolidated structured entities were £1,420m (2022: £1,665m). Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 495 Notes to the financial statements (continued) Scope of consolidation 35 Investments in associates and joint ventures Accounting for associates and joint ventures The equity accounted associates include the Group's investment in the Business Growth Fund £648m (2022: £669m) which has decreased due to a fair value loss in its investments by £(10)m (2022: £(21)m). Equity accounted Held at fair value through profit or loss Total 2023 Associates Joint ventures £m 670 — 670 £m 209 516 725 Total £m 879 516 1,395 2022 Associates Joint ventures £m 695 — 695 £m 227 435 662 Total £m 922 435 1,357 Summarised financial information for the Group’s equity accounted associates and joint ventures is set out below. The amounts shown are the Group’s share of the net income of the investees for the year ended 31 December 2023, with the exception of certain undertakings for which the amounts are based on accounts made up to dates not earlier than three months before the balance sheet date. Profit/(loss) from continuing operations Other comprehensive income/(loss) Total comprehensive income/(loss) from continuing operations Associates Joint ventures 2023 £m (10) — (10) 2022 £m (21) — (21) 2021 £m 219 1 220 2023 £m 1 (3) (2) 2022 2021 £m 26 1 27 £m 35 5 40 Unrecognised shares of the losses of individually immaterial associates and joint ventures were £nil (2022: £nil). The Group has provided £nil (2022: £nil) to its joint ventures and associates. The Barclays drawn commitments to finance or otherwise provide resources to its joint ventures and associates are £474m (2022: £474m) The Barclays share of the associates and joint ventures unutilised credit facilities commitments amounted to £1,695m (2022: £1,796m). 36 Securitisations Accounting for securitisations The Group uses securitisations as a source of finance and a means of risk transfer. Such transactions generally result in the transfer of contractual cash flows from portfolios of financial assets to holders of issued debt securities. Securitisations may, depending on the individual arrangement, result in continued recognition of the securitised assets and the recognition of the debt securities issued in the transaction; lead to partial continued recognition of the assets to the extent of the Group’s continuing involvement in those assets or lead to derecognition of the assets and the separate recognition, as assets or liabilities, of any rights and obligations created or retained in the transfer. Full derecognition only occurs when the Group transfers both its contractual right to receive cash flows from the financial assets, or retains the contractual rights to receive the cash flows, but assumes a contractual obligation to pay the cash flows to another party without material delay or reinvestment, and also transfers substantially all the risks and rewards of ownership, including credit risk, prepayment risk and interest rate risk. In the course of its normal banking activities, the Group makes transfers of financial assets, either where legal rights to the cash flows from the asset are passed to the counterparty or beneficially, where the Group retains the rights to the cash flows but assumes a responsibility to transfer them to the counterparty. Depending on the nature of the transaction, this may result in derecognition of the assets in their entirety, partial derecognition or no derecognition of the assets subject to the transfer. A summary of the main transactions, and the assets and liabilities and the financial risks arising from these transactions, is set out below: Transfers of financial assets that do not result in derecognition Securitisations The Group was party to securitisation transactions involving its credit card balances and other personal lending. In these transactions, the assets, interests in the assets, or beneficial interests in the cash flows arising from the assets, are transferred to a special purpose entity, which then issues interest bearing debt securities to third party investors. Securitisations may, depending on the individual arrangement, result in continued recognition of the securitised assets and the recognition of the debt securities issued in the transaction. Partial continued recognition of the assets to the extent of the Group’s Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 496 Notes to the financial statements (continued) Scope of consolidation continuing involvement in those assets can also occur or derecognition of the assets and the separate recognition, as assets or liabilities, of any rights and obligations created or retained in the transfer. The following table shows the carrying amount of securitised assets that have not resulted in full derecognition, together with the associated liabilities, for each category of asset on the balance sheet: 2023 2022 Assets Liabilities Assets Liabilities Carrying amount Fair value Carrying amount Fair value Carrying amount Fair value Carrying amount Fair value £m £m £m £m £m £m £m £m Loans and advances at amortised cost Credit cards, unsecured and other retail lending Mortgage Loans Financial assets at FVTPL Mortgage Loans Total 6,451 478 452 7,381 6,996 (2,369) 499 (21) (2,336) (26) 5,324 496 5,761 439 (1,537) (1,460) (20) (20) 452 — — 7,947 (2,390) (2,362) 330 6,150 330 6,530 — (1,557) — (1,480) Balances included within loans and advances at amortised cost represent securitisations where substantially all the risks and rewards of the asset have been retained by the Group and balances included within Financial assets at FVTPL represent securitisations where the risks and rewards are neither substantially transferred nor retained. The relationship between the transferred assets and the associated liabilities is that holders of notes may only look to cash flows from the securitised assets for payments of principal and interest due to them under the terms of their notes, although the contractual terms of their notes may be different to the maturity and interest of the transferred assets. If Barclays transfers a financial asset but does not transfer or retain substantially all the risk and rewards of the asset and retains control over it, the transferred assets is recognised to the extent of Barclays’ continuing involvement. Total Financial assets of £3,353m (2022: £828m) were transferred in this manner and the carrying value of the asset representing continued involvement is included in the table above. For transfers of assets in relation to repurchase agreements, refer to Note 37. Continuing involvement in financial assets that have been derecognised In some cases, the Group may have transferred a financial asset in its entirety but may have continuing involvement in it. This arises in asset securitisations where loans and asset backed securities were derecognised as a result of the Group’s involvement with asset backed securities, residential mortgage backed securities and commercial mortgage backed securities. Continuing involvement largely arises from providing financing into these structures in the form of retained notes, which do not bear first losses. The table below shows the potential financial implications of such continuing involvement: Type of transfer 2023 Asset backed securities Residential mortgage backed securities Commercial mortgage backed securities Total 2022 Asset backed securities Residential mortgage backed securities Commercial mortgage backed securities Total Note Continuing involvement1 Gain from continuing involvement Carrying amount Fair value Maximum exposure to loss For the year ended Cumulative to 31 December £m 2 1,798 392 2,192 8 913 412 £m 2 1,796 341 2,139 8 907 357 £m 2 1,798 392 2,192 8 913 412 1,333 1,272 1,333 £m — 49 3 52 1 18 5 24 £m 3 68 19 90 3 22 16 41 1 Assets which represent the Group’s continuing involvement in derecognised assets are recorded in Loans and advances at amortised cost and Debt securities at FVTPL. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 497 Notes to the financial statements (continued) Scope of consolidation 37 Assets pledged, collateral received and assets transferred Assets are pledged or transferred as collateral to secure liabilities under repurchase agreements, securitisations and stock lending agreements or as security deposits relating to derivatives. Assets transferred are non-cash assets transferred to a third party that do not qualify for derecognition from the Group balance sheet, for example because Barclays retains substantially all the exposure to those assets under an agreement to repurchase them in the future for a fixed price. Assets pledged or transferred as collateral include all assets categorised as encumbered in the disclosure on pages 197 to 201 of the Barclays PLC Pillar 3 Report 2023 (unaudited), other than those held in commercial paper conduits. In these transactions, the Group will be required to step in to provide financing itself under a liquidity facility if the vehicle cannot access the commercial paper market. Where non-cash assets are pledged or transferred as collateral for cash received, the asset continues to be recognised in full, and a related liability is also recognised on the balance sheet. Where non-cash assets are pledged or transferred as collateral in an exchange for non-cash assets, the transferred asset continues to be recognised in full, and there is no associated liability as the non-cash collateral received is not recognised on the balance sheet. The Group is unable to use, sell or pledge the transferred assets for the duration of the transaction and remains exposed to interest rate risk and credit risk on these pledged assets. Unless stated, the counterparty's recourse is not limited to the transferred assets. Collateralised transactions, such as securities lending and borrowing, repurchase and derivative transactions are conducted in accordance with standard terms which are customary in the market. The following table summarises the nature and carrying amount of the assets pledged as security: Cash collateral and settlements Loans and advances at amortised cost Trading portfolio assets Financial assets at fair value through the income statement Financial assets at fair value through other comprehensive income Assets pledged 2023 £m 73,495 71,018 117,325 9,847 23,503 295,188 2022 £m 78,996 64,772 63,969 8,220 18,210 234,167 The following table summarises the transferred financial assets and the associated liabilities. The transferred assets represent the gross carrying value of the assets pledged and the associated liabilities represent the IFRS balance sheet value of the related liability recorded on the balance sheet: As at 31 December 2023 Derivatives Repurchase agreements Securities lending arrangements Other As at 31 December 2022 Derivatives Repurchase agreements Securities lending arrangements Other Transferred assets Associated liabilities £m £m 78,390 86,712 118,632 11,454 295,188 79,474 74,291 67,554 12,848 234,167 (78,390) (55,006) — (10,179) (143,575) (79,474) (46,617) — (11,055) (137,146) For repurchase agreements the difference between transferred assets and the associated liabilities is predominantly due to IFRS netting. Included within Other are agreements where a counterparty's recourse is limited to the transferred assets. The relationship between the gross transferred assets and the associated liabilities is that holders of notes may only look to cash flows from the securitised assets for payments of principal and interest due to them under the terms of their notes. 2023 Recourse to transferred assets only 2022 Recourse to transferred assets only Carrying value Associated Transferred assets liabilities Transferred assets Fair value Associated liabilities Net position £m £m £m £m £m 7,381 (2,390) 7,947 (2,362) 5,585 6,150 (1,557) 6,530 (1,480) 5,050 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 498 Notes to the financial statements (continued) Scope of consolidation The Group has an additional £6.4bn (2022: £5.3bn) of loans and advances within its asset backed funding programmes that can readily be used to raise additional secured funding and are available to support future issuances. Collateral held as security for assets Under certain transactions, including reverse repurchase agreements and stock borrowing transactions, the Group is allowed to resell or re-pledge the collateral held. Collateralised transactions, such as securities lending and borrowing, repurchase and derivative transactions are conducted in accordance with standard terms which are customary in the market. The fair value at the balance sheet date of collateral accepted and re-pledged or transferred to others was as follows: Fair value of securities accepted as collateral Of which fair value of securities re-pledged/transferred to others 2023 £m 1,207,697 1,105,140 2022 £m 988,340 892,026 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 499 Notes to the financial statements (continued) Other disclosure matters Other disclosure matters The notes included in this section focus on related party transactions, Auditor's remuneration, Barclays PLC (the Parent company) disclosure, Directors’ remuneration and Transition disclosures. Related parties include any subsidiaries, associates, joint ventures and Key Management Personnel. 38 Related party transactions and Directors’ remuneration Related party transactions Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial or operational decisions, or one other party controls both. Subsidiaries Transactions between Barclays PLC and its subsidiaries meet the definition of related party transactions. Where these are eliminated on consolidation, they are not disclosed in the Group’s financial statements. Transactions between Barclays PLC and its subsidiaries are fully disclosed in Barclays PLC’s financial statements. A list of the Group’s principal subsidiaries is shown in Note 33. Associates, joint ventures and other entities The Group provides banking services to its associates, joint ventures and the Group pension funds (principally the UK Retirement Fund), providing loans, overdrafts, interest and non-interest bearing deposits and current accounts to these entities as well as other services. Group companies also provide investment management and custodian services to the Group pension schemes. All of these transactions are conducted on the same terms as third party transactions. Summarised financial information for the Group’s investments in associates and joint ventures is set out in Note 35. Amounts included in the Group’s financial statements, in aggregate, by category of related party entity are as follows: Associates Joint ventures Pension funds For the year ended and as at 31 December 2023 Total income Credit impairment charges Operating expenses Total assets Total liabilities For the year ended and as at 31 December 2022 Total income Credit impairment charges Operating expenses Total assets Total liabilities For the year ended and as at 31 December 2021 Total income Credit impairment charges Operating expenses £m 13 — (20) — 158 (2) — (15) — 408 — — (20) £m 70 — — 1,254 — 91 — — 1,336 — 50 — — £m 4 — (1) — 144 5 — (1) 3 166 5 — (1) Total liabilities includes derivatives transacted on behalf of the pension funds of £77m (2022: £110m). Key Management Personnel Key Management Personnel are defined as those persons having authority and responsibility for planning, directing and controlling the activities of Barclays PLC (directly or indirectly) and comprise the Directors and Officers of Barclays PLC, certain direct reports of the Group Chief Executive and the heads of major business units and functions. The Group provides banking services to Key Management Personnel and persons connected to them. Transactions during the year and the balances outstanding were as follows: Loans outstanding As at 1 January 1 Loans issued during the year 2 Loan repayments during the year As at 31 December Notes 1 Includes loans issued to existing Key Management Personnel and new or existing loans issued to newly appointed Key Management Personnel. 2 Includes loan repayments by existing Key Management Personnel and loans to former Key Management Personnel. 2023 £m 7.5 2.5 (1.7) 8.3 2022 £m 7.8 1.4 (1.7) 7.5 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 500 Notes to the financial statements (continued) Other disclosure matters No allowances for impairment were recognised in respect of loans to Key Management Personnel (or any connected person). Deposits outstanding As at 1 January 1 Deposits received during the year 2 Deposits repaid during the year As at 31 December Notes 2023 £m 15.2 105.7 (105.5) 15.4 2022 £m 9.1 47.9 (41.8) 15.2 1 Includes deposits received from existing Key Management Personnel and new or existing deposits received from newly appointed Key Management Personnel. 2 Includes deposits repaid by existing Key Management Personnel and deposits of former Key Management Personnel. Total commitments outstanding Total commitments outstanding refers to the total of any undrawn amounts on credit cards and/or overdraft facilities provided to Key Management Personnel. Total commitments outstanding as at 31 December 2023 were £0.5m (2022: £0.5m). All loans to Key Management Personnel (and persons connected to them) were made in the ordinary course of business; were made on substantially the same terms, including interest rates and collateral, as those prevailing at the same time for comparable transactions with other persons; and did not involve more than a normal risk of collectability or present other unfavourable features. Remuneration of Key Management Personnel Total remuneration awarded to Key Management Personnel below represents salaries, short term benefits and pensions contributions received during the year and awards made as part of the latest remuneration decisions in relation to the year. Costs recognised in the income statement reflect the accounting charge for the year included within operating expenses. The difference between the values awarded and the recognised income statement charge principally relates to the recognition of costs for deferred awards. Figures are provided for the period that individuals met the definition of Key Management Personnel. Salaries and other short-term benefits Pension costs Other long-term benefits Share-based payments Employer social security charges on emoluments Costs recognised for accounting purposes Employer social security charges on emoluments Other long-term benefits – difference between awards granted and costs recognised Share-based payments – difference between awards granted and costs recognised Total remuneration awarded Disclosure required by the Companies Act 2006 2023 £m 33.3 — 7.2 10.2 6.3 57.0 (6.3) 1.1 6.0 57.8 2022 £m 32.4 — 7.8 9.8 6.7 56.7 (6.7) — 6.5 56.5 2021 £m 37.8 — 8.5 12.2 7.2 65.7 (7.2) 3.1 6.9 68.5 The following information regarding the Barclays PLC Board of Directors is presented in accordance with the Companies Act 2006: 1 Aggregate emoluments 2 Amounts paid under LTIPs Notes 2023 £m 9.8 — 9.8 2022 £m 9.3 0.4 9.7 2021 £m 8.2 1.2 9.4 1 The aggregate emoluments include amounts paid for the 2023 year. In addition, deferred share awards for 2023 with a total value at grant of £1.5m (2022: £2.3m, 2021: £1.4m) will be made to Directors which will only vest subject to meeting certain conditions. 2 The figure above for "Amounts paid under LTIPs" relates to LTIP awards that were released to Directors during the year. Dividend shares released on the awards are excluded (where applicable). The LTIP figure in the single total figure table for Executive Directors' 2023 remuneration in the Directors' Remuneration report relates to awards that are scheduled to be released in 2024 in respect of the 2021-2023 LTIP cycle. There were no pension contributions paid to defined contribution schemes on behalf of Directors (2022: £nil, 2021: £nil). There were no notional pension contributions to defined contribution schemes. As at 31 December 2023, there were no Directors accruing benefits under a defined benefit scheme (2022: nil, 2021: £nil). Directors’ and Officers’ shareholdings and options The beneficial ownership of ordinary share capital of Barclays PLC by all Directors and Officers of Barclays PLC (involving 26 persons) at 31 December 2023 amounted to 14,833,002 (2022: 15,944,986) ordinary shares of 25p each (0.10% of the ordinary share capital outstanding). As at 31 December 2023, Executive Directors and Officers of Barclays PLC (involving 16 persons) held options to purchase a total of 67,319 (2022: 62,268) Barclays PLC ordinary shares of 25p each at a weighted average price of 92p under Sharesave. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 501 Notes to the financial statements (continued) Other disclosure matters Advances and credit to Directors and guarantees on behalf of Directors In accordance with Section 413 of the Companies Act 2006, the total amount of advances and credits made available in 2023 to persons who served as Directors during the year was £0.3m (2022: £0.2m). The total value of guarantees entered into on behalf of Directors during 2023 was £nil (2022: £nil). 39 Auditor’s remuneration Auditor’s remuneration is included within consultancy, legal and professional fees in administration and general expenses and comprises: Audit of the Barclays Group's annual accounts Other services: 1 Audit of the Company's subsidiaries 2 Other audit related fees Other services Total Auditor's remuneration Notes 2023 £m 11 53 12 2 78 2022 £m 10 48 11 2 71 2021 £m 9 41 10 2 62 1 Comprises the fees for the statutory audit of subsidiaries both inside and outside the UK and fees for work performed by associates of KPMG in respect of the consolidated financial statements of the Company. 2 Comprises services in relation to statutory and regulatory filings. These include audit services for the review of the interim financial information under the Listing Rules of the UK listing authority. Audit scope changes are finalised following the completion of the audit and recognised when agreed. The 2023 audit fee includes £1m (2022: £2m, 2021: £3m ) relating to the previous year’s audit. Barclays associated pension schemes Audit fee 2023 £m 0.3 2022 £m 0.3 2021 £m 0.3 Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 502 Notes to the financial statements (continued) Other disclosure matters 40 Assets and liabilities included in disposal group classified as held for sale Accounting for non-current assets held for sale and associated liabilities The Group applies IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. Non-current assets (or disposal groups) are classified as held for sale when their carrying amount is to be recovered principally through a sale transaction rather than continuing use. In order to be classified as held for sale, the asset must be available for immediate sale in its present condition subject only to terms that are usual and customary, and the sale must be highly probable. Non-current assets (or disposal groups) held for sale are measured at the lower of carrying amount and fair value less cost to sell. Assets and liabilities classified as held for sale are presented separately in the consolidated balance sheet. Management accounting estimates and judgements Management judgement is required in determining whether the IFRS 5 held for sale classification criteria are met, in particular whether the sale is highly probable and expected to qualify for recognition as a completed sale within 12 months of classification. This assessment requires consideration of how committed management is to the sales plan, the likelihood of obtaining regulatory or other external approvals which is often required for sales of banking operations and how committed the buyer is to complete the sales transaction within the agreed timelines. Barclays is currently engaged in a process to sell its German consumer finance business (comprising credit cards, unsecured personal loans and deposits), currently within CC&P, as part of our ambition to simplify Barclays and support our focus on growing our key businesses. A sale is expected to complete in 2024. The perimeter of the disposal group has been accounted for in line with the requirements of IFRS5 as at 31 December 2023. A detailed analysis of the disposal group is presented below: As at 31 December Assets included in disposal groups classified as held for sale Loans and advances to customers Intangible assets Property, plant and equipment Other assets Total assets classified as held for sale Liabilities included in disposal groups classified as held for sale Deposits from customers Other liabilities Provisions Total liabilities classified as held for sale Net assets classified as held for sale 41 Subsequent events 2023 £m 3,855 15 24 22 3,916 3,077 83 4 3,164 752 Barclays announced on 9 February 2024 that Barclays Bank UK PLC has entered into an agreement with Tesco Personal Finance plc (operating using the trading name “Tesco Bank”) to acquire its retail banking business, which includes credit cards, unsecured personal loans, deposits and the operating infrastructure. Additionally upon completion, Barclays Bank UK PLC will enter into a long-term, exclusive strategic partnership with Tesco Stores Limited for an initial period of 10 years to market and distribute credit cards, unsecured personal loans and deposits using the Tesco brand, as well as explore other opportunities to offer financial services to Tesco customers. The transaction involves the acquisition of approximately £8.3bn of unsecured lending balances, including approximately £4.2bn of gross credit card receivables and £4.1bn of gross unsecured personal loans, together with approximately £6.7bn in customer deposits. The acquisition is expected to occur in H2 2024, subject to court sanction and regulatory approvals. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 503 Notes to the financial statements (continued) Other disclosure matters 42 Barclays PLC (the Parent company) Total income Dividend received from subsidiaries Dividends received from subsidiaries of £2,818m (2022: £2,797m, 2021: £1,356m) relates to dividends received from Barclays Execution Services Limited £165m, Barclays Bank UK PLC £1,305m and Barclays Bank PLC £1,348m. Other income Other income of £1,174m (2022: £(654)m expense, 2021: £659m income) includes fair value and foreign exchange gains of £50m (2022: £1,673m, 2021: £250m) on positions with subsidiaries and £985m (2022: £905m, 2021: £804m) of income received from gross coupon payments on Barclays Bank PLC and Barclays Bank UK PLC-issued AT1 securities. Total assets and liabilities Investment in subsidiaries The investment in subsidiaries of £64,461m (2022: £64,544m) predominantly relates to investments in the ordinary shares of Barclays Bank PLC of £36,340m (2022: £36,340m) and their AT1 securities of £10,757m (2022: £10,760m), as well as investments in the ordinary shares of Barclays Bank UK PLC of £14,245m (2022: 14,245m) and their AT1 securities of £2,439m (2022: £2,570m). The decrease of £83m during the year resulted from a capital injection of £50m to Barclays Principal Investments Limited offset by a decrease in the AT1 holdings and associated fair value which totalled £133m. Impairment in subsidiaries At the end of each reporting period an impairment review is undertaken in respect of investment in the ordinary shares of subsidiaries. Where impairment may be indicated a test of the carrying value against the recoverable value is performed; impairment being indicated where the investment exceeds the recoverable amount. The recoverable amount is calculated as a value in use (VIU) which is derived from the present value of future cash flows expected to be received from the investment. The VIU calculations use forecast profits based on financial budgets approved by management, covering a five year period as an approximation of future cash flows discounted using a pre-tax discount rate appropriate to the subsidiary being tested. A terminal growth rate has then been applied to the cash flows thereafter which is based upon expectations of future inflation rates. The 2023 review identified the value in use calculated was higher than the carrying value for all subsidiaries. Loans and advances to subsidiaries During the year loans and advances to subsidiaries decreased by £4,702m to £18,926m (2022: £23,628m). The decrease was largely driven due to maturities of £4,982m intra-group loans to Barclays PLC subsidiaries and foreign exchange impact of £1,049m due to the appreciation of GBP largely against USD. This was partially offset by the new issuances of intra-group loans to Barclays PLC subsidiaries of £1,260m. Subordinated liabilities and debt securities in issue During the year, Barclays PLC issued USD1,500m of Fixed-to-Floating Rate Resetting Subordinated Callable Notes, which are included within the subordinated liabilities balance of £10,018m (2022: £11,230m). Debt securities in issue of £18,308m (2022: £24,086m) have reduced during the year primarily due to maturities of £4,931m senior issuances and the foreign exchange impact of £847m due to the appreciation of GBP largely against USD. Financial assets and liabilities designated at fair value Financial liabilities designated at fair value of £31,832mm (2022: £22,971m) primarily included new issuances during the year of EUR1,250m Fixed Rate Resetting Senior Callable Notes, £2,000m Fixed Rate Resetting Senior Callable Notes, USD8,200m Fixed-to- Floating Rate Senior Callable Notes and USD300m Floating Rate Senior Notes . The proceeds raised through these transactions were used to invest in subsidiaries of Barclays PLC and are included within the financial assets designated at fair value through the income statement balance of £35,787m (2022: £28,930m). The effect of changes in the liabilities fair value, including those due to credit risk, is expected to offset the changes in the fair value of the related financial asset in the income statement. The difference between the financial liabilities carrying amount and the contractual amount on maturity is £1,838m (2022: £2,100m). Derivative financial instruments During the year derivative financial liabilities decreased by £195m to £711m (2022: £906m). This is primarily driven by the gain in derivatives due to a decreasing rate environment. Total equity Called up share capital and share premium Called up share capital and share premium of Barclays PLC is £4,288m (2022: £4,373m). The decrease in the year is primarily due to 837m shares repurchased with a total nominal value of £209m. This decrease was offset by shares issued under employee share schemes. Other equity instruments Other equity instruments of £13,198m (2022: £13,250m) comprises AT1 securities issued by Barclays PLC. The AT1 securities are perpetual securities with no fixed maturity and are structured to qualify as AT1 instruments under prevailing capital rules applicable as at the relevant issue date. During the year there were three issuances with principal amounts totalling £1,500m, USD1,750m and SGD400m and redemptions with principal amounts totalling £1,250m and USD2,500m. For further details, please refer to Note 27. Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 504 Notes to the financial statements (continued) Other disclosure matters 43 Related undertakings The Group’s corporate structure consists of a number of related undertakings, comprising subsidiary undertakings, joint ventures, associated undertakings and significant holdings. A full list of these related undertakings is set out below, together with the country of incorporation, registered office (or principal place of business) and the identity and percentage of each share class held by the Group. The information is provided as at 31 December 2023. The entities are grouped by the countries in which they are incorporated. The profits earned by the activities of these entities are in some cases taxed in countries other than the country of incorporation, for example where the entity carries on business through a branch in a territory outside of its country of incorporation . Barclays PLC Country Snapshot provides details of where the Group carries on its business, where its profits are subject to tax and the taxes it pays in each country it operates in. Wholly owned subsidiaries Unless otherwise stated the undertakings below are wholly owned and included in the consolidation and the share capital held by the Group comprises ordinary and/or common shares, which are held by subsidiaries of Barclays PLC. Unless otherwise stated, the Group holds 100% of the nominal value of each share class. Notes A B C D E F G H I J K L M N O P Q Directly held by Barclays PLC Partnership Interest Membership Interest Guarantor Preference Shares A Preference Shares B Preference Shares Ordinary/Common Shares in addition to other shares A Ordinary Shares B Ordinary Shares C Ordinary Shares F Ordinary Shares First Preference Shares, Second Preference shares Registered Address not in country of incorporation Core Shares, Insurance (Classified) Shares Class B, C, D (100%), E, F, G, H, I (94.36%), J (95.32%) and K (100%) Non-Redeemable Ordinary Shares Notes R S T U V W X Y Z AA BB CC Class A, B and D Shares Class A and Class B Shares PEF Carry Shares Not Consolidated (see Note 33 Principal Subsidiaries) USD Linked Ordinary Shares Redeemable Class B Shares Capital Contribution Shares Class A Redeemable Preference Shares Class B Redeemable Preference Shares First Class Common Shares, Second Class Common Shares Tracker 1 GBP, USD, Euro Shares; Tracker 2 USD Shares, Tracker 3 USD Shares Non-Voting Redeemable Preference Shares Wholly owned subsidiaries United Kingdom 1 Churchill Place, London, E14 5HP Wholly owned subsidiaries Note Barclays SAMS Limited Barclays Security Trustee Limited Barclays Services (Japan) Limited Barclays Shea Limited Barclays Term Funding Limited Liability Partnership Barclays UK Investments Limited Barclays Unquoted Investments Limited Barclays Unquoted Property Investments Limited Barclays Wealth Nominees Limited Barclayshare Nominees Limited Barcosec Limited Barsec Nominees Limited BB Client Nominees Limited BMI (No.9) Limited BNRI ENG 2014 Limited Partnership BNRI ENG GP LLP Note BNRI England 2010 Limited Partnership BNRI England 2012 Limited Partnership A B B B B B Carnegie Holdings Limited H, I, J Aequor Investments Limited Chapelcrest Investments Limited Alynore Investments Limited Partnership B Clydesdale Financial Services Limited Ardencroft Investments Limited B D & B Investments Limited B.P.B. (Holdings) Limited Barclay Leasing Limited Barclays Aldersgate Investments Limited Barclays Asset Management Limited Barclays Bank PLC Barclays Bank UK PLC Cornwall Home Loans Limited CPIA England 2009 Limited Partnership CPIA England No.2 Limited Partnership B B Dorset Home Loans Limited Durlacher Nominees Limited Eagle Financial and Leasing Services (UK) Limited Finpart Nominees Limited FIRSTPLUS Financial Group Limited A, E, H A Barclays Capital Asia Holdings Limited Foltus Investments Limited Barclays Capital Nominees (No.2) Limited Barclays Capital Nominees (No.3) Limited Barclays Capital Nominees Limited Barclays Capital Securities Client Nominee Limited Global Dynasty Natural Resource Private Equity Limited Partnership B Globe Nominees Limited Hawkins Funding Limited Heraldglen Limited Barclays Capital Securities Limited Barclays CCP Funding LLP E, H B Isle of Wight Home Loans Limited J.V. Estates Limited Barclays Converted Investments (No.2) Limited Kirsche Investments Limited Barclays Direct Investing Nominees Limited Barclays Directors Limited Barclays Equity Holdings Limited Leonis Investments LLP Long Island Assets Limited Maloney Investments Limited Barclays Execution Services Limited A Menlo Investments Limited Barclays Executive Schemes Trustees Limited Mercantile Credit Company Limited Barclays Financial Planning Nominee Company Limited Barclays Funds Investments Limited Barclays Group Holdings Limited Barclays Industrial Development Limited Barclays Industrial Investments Limited Barclays Insurance Services Company Limited Barclays International Holdings Limited Barclays Investment Management Limited Barclays Investment Solutions Limited Barclays Leasing (No.9) Limited Barclays Long Island Limited Mercantile Leasing Company (No.132) Limited MK Opportunities LP Naxos Investments Limited North Colonnade Investments Limited Northwharf Investments Limited Northwharf Nominees Limited Oak Pension Asset Management Limited Radbroke Mortgages UK Limited Real Estate Participation Management Limited Real Estate Participation Services Limited Relative Value Investments UK Limited Liability Partnership Barclays Nominees (George Yard) Limited U Relative Value Trading Limited Barclays OCIO Services Limited Barclays Pension Funds Trustees Limited Roder Investments No. 1 Limited Roder Investments No. 2 Limited Barclays Principal Investments Limited A, I, J RVT CLO Investments LLP Barclays Private Bank Surety Trust Limited H, M B B U B H, BB H, BB B Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 505 Notes to the financial statements (continued) Other disclosure matters Wholly owned subsidiaries Note Wholly owned subsidiaries Note Wholly owned subsidiaries Note Argentina France Barclays Capital Canada Inc. Hong Kong Water Street Investments Limited U Brazil Sustainable Impact Capital Limited Swan Lane Investments Limited US Real Estate Holdings No.1 Limited US Real Estate Holdings No.2 Limited US Real Estate Holdings No.3 Limited US Real Estate Holdings No.4 Limited US Real Estate Holdings No.5 Limited US Real Estate Holdings No.6 Limited Wedd Jefferson (Nominees) Limited Westferry Investments Limited Woolwich Homes Limited Woolwich Qualifying Employee Share Ownership Trustee Limited Zeban Nominees Limited C/O Teneo Financial Advisory Limited, 3rd Floor, The Colmore Building, 20 Colmore Circus Queensway, Birmingham, West Midlands, B4 6AT Barclays Capital Finance Limited (In Liquidation) Barclays Capital Japan Securities Holdings Limited (In Liquidation) Barclays Global Shareplans Nominee Limited (In Liquidation) Barclays Nominees (Branches) Limited (In Liquidation) Barclays Singapore Global Shareplans Nominee Limited (In Liquidation) Cobalt Investments Limited (In Liquidation) DMW Realty Limited (In Liquidation) 855 Leandro N.Alem Avenue, 8th Floor, Buenos Aires Compañía Sudamerica S.A. Marval, O’Farrell & Mairal, Av. Leandro N. Alem 882, Buenos Aires, C1001AAQ Compañia Regional del Sur S.A. Av. Brigadeiro Faria Lima, No.4.440, 12th Floor, Bairro Itaim Bibi, Sao Paulo, CEP, 04538-132 Barclays Brasil Assessoria Financeira Ltda BNC Brazil Consultoria Empresarial Ltda Canada 333 Bay Street, Suite 4910, Toronto ON M5H 2R2 Stikeman Elliot LLP, 199 Bay Street, 5300 Commerce Court West, Toronto ON M5L 1B9 Barclays Corporation Limited 1 Churchill Place, London, E14 5HP CPIA Canada Holdings B, N Cayman Islands PO Box 309, Ugland House, George Town, Grand Cayman, KY1-1104 Solution Personal Finance Limited (In Liquidation) Alymere Investments Limited Ascot House, Maidenhead Office Park, Maidenhead, SL6 3QQ Kensington Mortgage Company Limited Kensington Mortgage Services Limited 1-4, Clyde Place Lane, Glasgow, G5 8DP R.C. Greig Nominees Limited 50 Lothian Road, Festival Square, Edinburgh, EH3 9WJ BNRI PIA Scot GP Limited BNRI Scots GP, LLP Pecan Aggregator LP B B, U Logic House, Waterfront Business Park, Park, Fleet Road, Fleet, GU51 3SB The Logic Group Enterprises Limited Analytical Trade UK Limited Barclays Capital (Cayman) Limited Barclays Securities Financing Limited Barclays US Holdings Limited Braven Investments No.1 Limited Calthorpe Investments Limited Capton Investments Limited Claudas Investments Limited Claudas Investments Two Limited CPIA Investments No.2 Limited Gallen Investments Limited Hurley Investments No.1 Limited (In Liquidation) Mintaka Investments No. 4 Limited Palomino Limited Pelleas Investments Limited Pippin Island Investments Limited Razzoli Investments Limited The Logic Group Holdings Limited I RVH Limited 9, allée Scheffer, L-2520, Luxembourg Barclays Claudas Investments Partnership B, N Barclays Pelleas Investments Limited Partnership B, N Barclays Blossom Finance Limited Partnership B, N Wessex Investments Limited (In Liquidation) Hornbeam Limited Walkers Corporate Limited, Cayman Corporate Centre, 27 Hospital Road, George Town, KY1- 9008 Long Island Holding B Limited (In Liquidation) F, G, H F, G ,H E, I H, Y, Z U E, H E, H U 34-36 avenue de Friedland, 75008, Paris Barclays ADF Germany Stuttgarter Straße 55-57, 73033 Göppingen Holding Stuttgarter Straße GmbH (In Liquidation) Guernsey P.O. Box 33, Dorey Court, Admiral Park, St. Peter Port, GY1 4AT Barclays Insurance Guernsey PCC Limited Barclays UKRF No.1 IC Limited Barclays UKRF ICC Limited Barclays UKRF No.2 IC Ltd O U U U 42nd floor Citibank Tower, Citibank Plaza, 3 Garden Road Barclays Bank (Hong Kong Nominees) Limited (In Liquidation) Barclays Capital Asia Nominees Limited (In Liquidation) Level 41, Cheung Kong Center, 2 Queen's Road, Central Barclays Capital Asia Limited India 208 Ceejay House, Shivsagar Estate, Dr A Beasant Road, Worli, Mumbai, 400 018 Barclays Securities (India) Private Limited Barclays Wealth Trustees (India) Private Limited 5th to 12th Floor (Part), Building G2, Gera Commerzone SEZ, Survey No.65, Kharadi, Pune, 411014 Barclays Global Service Centre Private Limited Nirlon Knowledge Park, Level 9, Block B-6, Off Western Express Highway, Goregaon (East), Mumbai, 400063 Barclays Investments & Loans (India) Private Limited E, H Ireland One Molesworth Street, Dublin 2, D02RF29 Barclaycard International Payments Limited Barclays Bank Ireland Public Limited Company Barclays Europe Client Nominees Designated Activity Company Barclays Europe Firm Nominees Designated Activity Company Barclays Europe Nominees Designated Activity Company 25-28 North Wall Quay, Dublin1, D01H104 Erimon Home Loans Ireland Limited 70 Sir John Rogerson’s Quay, Dublin 2 Barclays Finance Ireland Limited Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 506 Notes to the financial statements (continued) Other disclosure matters Wholly owned subsidiaries Note Wholly owned subsidiaries Note Wholly owned subsidiaries Corporation Service Company, 251 Little Falls Drive, Wilmington, DE 19808 Barclays Ireland Investments LP B, N Isle of Man Mauritius C/O Rogers Capital Corporate Services Limited, 3rd Floor, Rogers House, No.5 President John Kennedy Street, Port Louis Barclays Capital Mauritius Limited (In Liquidation) Eagle Court, Circular Road, Douglas, IM1 1AD Barclays Capital Securities Mauritius Limited Barclays Nominees (Manx) Limited I, J Barclays Private Clients International Limited 2nd Floor, St Georges Court, Upper Church Street, Douglas, IM1 1EE Barclays Holdings (Isle of Man) Limited (In Liquidation) Japan Fifth Floor Ebene Esplanade, 24 Bank Street, Cybercity 72201 Ebene Barclays Mauritius Overseas Holdings Limited Mexico Paseo de la Reforma 505, 41 Floor, Torre Mayor, Col. Cuauhtemoc, CP 06500 10-1, Roppongi 6-chome, Minato-ku, Tokyo Barclays Bank Mexico, S.A. Barclays Funds and Advisory Japan Limited Barclays Capital Casa de Bolsa, S.A. de C.V. Barclays Securities Japan Limited F, H Grupo Financiero Barclays Mexico, S.A. de C.V. Barclays Wealth Services Limited Servicios Barclays, S.A. de C.V. (In Liquidation) J, L J, L J, L Jersey Monaco Gaspé House, 66-72 Esplanade, St. Helier, JE1 1GH Barclays Services Jersey Limited 31 Avenue de la Costa, Monte Carlo BP 339 Barclays Private Asset Management (Monaco) S.A.M 5 Espalanade, St Helier, JE2 3QA Barclays Wealth Management Jersey Limited 13 Library Place, St Helier, JE4 8NE Barclays Nominees (Jersey) Limited Barclaytrust Channel Islands Limited Estera Trust (Jersey) Limited, 13-14 Esplanade, St Helier, JE1 1EE, Jersey MK Opportunities GP Ltd Saudi Arabia 3rd Floor Al Dahna Center, 114 Al-Ahsa Street, PO Box 1454, Riyadh 11431 Barclays Saudi Arabia (In Liquidation) Singapore 10 Marina Boulevard, #25-01 Marina Bay Financial Centre, Tower 2, 018983 Barclays Merchant Bank (Singapore) Ltd. Luxembourg 9, allée Scheffer, L-2520 Spain Calle Jose, Abascal 51, 28003, Madrid Barclays Bedivere Investments S.à r.l. Barclays Tenedora De Inmuebles SL. Barclays Capital Energy Inc. Barclays Capital Equities Trading GP Barclays Capital Holdings Inc. Barclays Capital Real Estate Finance Inc. Barclays Capital Real Estate Holdings Inc. Barclays Capital Real Estate Inc. Barclays Commercial Mortgage Securities LLC Barclays Dryrock Funding LLC Barclays Financial LLC Barclays Group US Inc. Barclays Oversight Management Inc. Barclays Receivables LLC Barclays Services Corporation Barclays Services LLC Barclays US CCP Funding LLC Barclays US Investments Inc. Barclays US LLC BCAP LLC Gracechurch Services Corporation Lagalla Investments LLC Long Island Holding A LLC Marbury Holdings LLC Preferred Liquidity, LLC Procella Investments No.2 LLC Procella Investments No.3 LLC Relative Value Holdings, LLC Surrey Funding Corporation Sussex Purchasing Corporation Sutton Funding LLC US Secured Investments LLC Verain Investments LLC Wilmington Riverfront LLC 100 Bank Street, Suite 630, Burlington, Vermont 05401 Barclays Insurance U.S. Inc. Corporation Service Company, 80 State Street, Albany, NY, 12207-2543 Note B F, G, H C C C C C C C C I C C C X C Barclays Cantal Investments S.à r.l. Barclays Capital Luxembourg S.à r.l. Barclays Capital Trading Luxembourg S.à r.l. Barclays Claudas Investments S.à r.l. Barclays Equity Index Investments S.à r.l. Barclays International Luxembourg Dollar Holdings S.à r.l. Barclays Luxembourg EUR Holdings S.à r.l Barclays Luxembourg GBP Holdings S.à r.l. Barclays Luxembourg Global Funding S.à r.l. Barclays Luxembourg Holdings S.à r.l. Barclays Luxembourg Holdings SSC BNRI Limehouse No.1 S.à r.l. 68-70 Boulevard de la Petrusse, L-2320 Adler Toy Holding Sarl 10 rue du Cha'teau d'Eau, Leudelange, Grand Duchy of Luxembourg L-3364 BPM Management GP SARL BVP Galvani Global, S.A.U. Barclays Equity Holdings Inc. Switzerland Chemin de Grange Canal 18-20, PO Box 3941, 1211, Geneva Barclays Bank (Suisse) SA Barclays Switzerland Services SA BPB Holdings SA Taiwan 19F-1, No. 7, Xinyi Road, Sec. 5, Taipei,A322, Taiwan Q Q H, V B P Corporation Service Company. Goodwin Square, 225 Asylum Street, 20th Floor Hartford CT 06103 Barclays Capital Inc. Corporation Service Company, 2626, Glenwood Ave, Suite 550, Raleigh, NC, 27608 Barclays US GPF Inc. Equifirst Corporation (In Liquidation, Dissolved with State of North Carolina) Barclays Securities Taiwan Limited 125 S West Street, Wilmington, DE 19801 Curve Investments GP B Barclays Dryrock Issuance Trust United States Corporation Service Company, 251 Little Falls Drive, Wilmington, DE 19808 Analytical Trade Holdings LLC Barclays Asset Backed Depositor LLC Barclays Bank Delaware Barclays Capital Derivatives Funding LLC C C Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 507 Notes to the financial statements (continued) Other disclosure matters Other Related Undertakings Other Related Undertakings % Note Other Related Undertakings % Note Unless otherwise stated, the undertakings below are included in the consolidation and the share capital held by the Group comprises ordinary and/or common shares, which are held by subsidiaries of Barclays PLC. The percentage of the nominal value of each share class held by the Group is provided below. Other Related Undertakings Note % United Kingdom 1 Churchill Place, London, E14 5HP Barclaycard Funding PLC 100.00 PSA Credit Company Limited (In Liquidation) Barclays Covered Bonds Limited Liability Partnership Barclays Secured Funding (LM) Limited St Helen’s, 1 Undershaft, London, EC3P 3DQ 100.00 100.00 50.00 20.00 I I K B 3rd Floor, 25 Soho Square,London,W1D 3QR, Female Innovators Lab LP 61.00 B Sweden c/o ForeningsSparbanken AB 105 34 Stockholm 1 America Square, Crosswall, London, EC3N 2SG BMC (UK) Ltd 47.30 E, I, U C/O Cooley (Uk) Llp, 22 Bishopsgate, London, EC2N 4BQ Barclays Black Formation Investments I LP 100.00 Barclays Black Formation Investments II LP 100.00 B B 1-4 Clyde Place, Glasgow, G5 8DP Buchanan Wharf (Glasgow) Management Limited 78.00 D Belgium Klipperstraat 15 2030 Antwerp EnterCard Group AB 100.00 J, U United States Corporation Services Company, 251 Little Falls, Drive Wilmington, DE 19808 DG Solar Lessee, LLC 75.00 C, U Corporation Trust Company, Corporation Trust Centre, 1209 Orange Street, Wilmington DE 19801 DG Solar Lessee II, LLC VS BC Solar Lessee I LLC 75.00 50.00 C, U C, U 1415 Louisiana Street, Suite 1600, TX 77002-0000 Sabine Oil & Gas Holdings, Inc.(In Liquidation) 22.12 U Euphony Benelux NV (In Liquidation) 20.00 U Joint Ventures The related undertaking below is dealt with as a Joint Venture in accordance with s. 18, Schedule 4, The Large and Medium- sized Companies and Groups (Accounts and Reports) Regulations 2008 and is proportionally consolidated. The proportion of the capital of the related undertaking held by the Group is stated below. Joint Venture Note % United Kingdom Vaultex UK Limited 50.00 Joint management factors The Board of Directors of the above Joint Venture comprises two Barclays representative Directors, two JV partner Directors and three non-JV partner Directors. The Board of Directors are responsible for setting the Company strategy and budgets. The last financial year of the above JV ended on 6 October 2023 and the average number of monthly employees reported in the accounts was 1,216. . Igloo Regeneration (General Partner) Limited 25.00 K, U Cayman Islands 3-5 London Road, Rainham, Kent, ME8 7RG Maples Corporate Services Limited, PO Box 309GT, Ugland House, South Church Street, Grand Cayman, KY1-1104 Trade Ideas Limited 20.00 U Cupric Canyon Capital GP Limited 50 Lothian Road, Festival Square, Edinburgh, EH3 9WJ Equistone Founder Partner II L.P. Equistone Founder Partner III L.P. 20.00 20.00 B, U B, U Cupric Canyon Capital LP Newman Holdings Limited (In Liquidation) Southern Peaks Mining LP SPM GP Limited 50.00 42.17 80.60 54.40 90.00 U I, U I, U B, U U Enigma, Wavendon Business Park Milton Keynes, MK178LX Intelligent Processing Solutions Limited 19.50 U Korea, Republic of 18th Floor, Daishin Finance Centre, 343, Samil-daero, Jung-go, Seoul Woori BC Pegasus Securitization Specialty Co. Ltd 70.00 AA Luxembourg 9, allee Scheffer, L-2520 Barclays Alzin Investments S.à r.l. 100.00 Barclays Bordang Investments S.à r.l. 100.00 R S Barclays Lamorak Investments S.à r.l. 100.00 F,Q Preferred Funding S.à r.l. 100.00 W Preferred Investments S.à r.l. 100.00 H, W C/O Azets Holdings Limited 5th Floor, 98 King Street, Manchester, M2 4WU Full House Holdings Limited (In Liquidation) 67.42 I, U 13-15 York Buildings, London, WC2N 6JU BGF Group PLC 24.62 I, U Unit 9 Westbrook Court, Sharrowvale Road, Sheffield, S11 8YZ Palms Row Healthcare Holdings Limited 5th Floor, 44 Great Marlborough Street,London,W1F 7JL Malta 99.00 U, CC RS2 Buildings, Fort Road, Mosta MST 1859 RS2 Software PLC 18.14 U AVFI TIDE I LP 37.60 B, U Netherlands 41 Luke Street, London, EC2A 4DP Fintech for International Development Limited (In Liquidation) 26.37 I, U 100.00 J Alexanderstraat 18, The Hague, 2514 JM, Zuid-Holland Tulip Oil Holding BV 34.50 23.00 I, U K Strategic report Shareholder information Climate and sustainability report Governance Risk review Financial review Financial statements Barclays PLC Annual Report 2023 508 Subject to Barclays PLC’s obligations under the applicable laws and regulations of any relevant jurisdiction (including, without limitation, the UK and the US) in relation to disclosure and ongoing information, we undertake no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise. This document is printed on Revive 100 Offset, made from 100% FSC® Rec ycled certified fibre sourced from de-inked post-consumer waste. The printer and the manufacturing mill are both credited with ISO 14001 Environmental Management Systems Standard and both are FSC® certified. The mill also holds EMAS, the EU Eco-label. Revive 100 Offset is a Carbon balanced paper which means that the carbon emissions associated with its manufacture have been measured and offset using the World Land Trust’s Carbon Balanced scheme. Notes to the financial statements (continued) Other disclosure matters Notes Forward-looking statements The terms Barclays or Group refer to Barclays PLC together with its subsidiaries. Unless otherwise stated, the income statement analysis compares the year ended 31 December 2023 to the corresponding twelve months of 2022 and balance sheet analysis as at 31 December 2023 with comparatives relating to 31 December 2022. The abbreviations ‘£m’ and ‘£bn’ represent millions and thousands of millions of Pounds Sterling respectively; the abbreviations ‘$m’ and ‘$bn’ represent millions and thousands of millions of US Dollars respectively; and the abbreviations ‘€m’ and ‘€bn’ represent millions and thousands of millions of Euros respectively. There are a number of key judgement areas, for example impairment calculations, which are based on models and which are subject to ongoing adjustment and modifications. Reported numbers reflect best estimates and judgements at the given point in time. Relevant terms that are used in this document but are not defined under applicable regulatory guidance or International Financial Reporting Standards (IFRS) are explained in the results glossary that can be accessed at home.barclays/ investor-relations/reports-and-events/ latest-financial-results. These results will be filed on a Form 20-F with the US Securities and Exchange Commission (SEC) as soon as practicable following their publication. Once filed with the SEC, a copy of the Form 20-F will be available from the Barclays Investor Relations website at home.barclays/ annualreport and from the SEC’s website at sec.gov. Barclays is a frequent issuer in the debt capital markets and regularly meets with investors via formal road-shows and other ad hoc meetings. Consistent with its usual practice, Barclays expects that from time to time over the coming quarter it will meet with investors globally to discuss these results and other matters relating to the Group. Non-IFRS performance measures Barclays’ management believes that the non-IFRS performance measures included in this document provide valuable information to the readers of the financial statements as they enable the reader to identify a more consistent basis for comparing the businesses’ performance between financial periods and provide more detail concerning the elements of performance which the managers of these businesses are most directly able to influence or are relevant for an assessment of the Group. They also reflect an important aspect of the way in which operating targets are defined and performance is monitored by Barclays’ management. However, any non- IFRS performance measures in this document are not a substitute for IFRS measures and readers should consider the IFRS measures as well. Refer to pages 387 to 393 for further information and calculations of non-IFRS performance measures included throughout this document, and the most directly comparable IFRS measures. This document contains certain forward-looking statements within the meaning of Section 21E of the US Securities Exchange Act of 1934, as amended, and Section 27A of the US Securities Act of 1933, as amended, with respect to the Group. Barclays cautions readers that no forward-looking statement is a guarantee of future performance and that actual results or other financial condition or performance measures could differ materially from those contained in the forward-looking statements. Forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements sometimes use words such as ‘may’, ‘will’, ‘seek’, ‘continue’, ‘aim’, ‘anticipate’, ‘target’, ‘projected’, ‘expect’, ‘estimate’, ‘intend’, ‘plan’, ‘goal’, ‘believe’, ‘achieve’ or other words of similar meaning. Forward-looking statements can be made in writing but also may be made verbally by directors, officers and employees of the Group (including during management presentations) in connection with this document. Examples of forward-looking statements include, among others, statements or guidance regarding or relating to the Group’s future financial position, business strategy, income levels, costs, assets and liabilities, impairment charges, provisions, capital leverage and other regulatory ratios, capital distributions (including policy on dividends and share buybacks), return on tangible equity, projected levels of growth in banking and financial markets, industry trends, any commitments and targets (including environmental, social and governance (ESG) commitments and targets), plans and objectives for future operations and other statements that are not historical or current facts. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Forward-looking statements speak only as at the date on which they are made. Forward-looking statements may be affected by a number of factors, including, without limitation: changes in legislation, regulations, governmental and regulatory policies, expectations and actions, voluntary codes of practices and the interpretation thereof, changes in International Financial Reporting Standards and other accounting standards, including practices with regard to the interpretation and application thereof and emerging and developing ESG reporting standards; the outcome of current and future legal proceedings and regulatory investigations; the Group’s ability along with governments and other stakeholders to measure, manage and mitigate the impacts of climate change effectively; environmental, social and geopolitical risks and incidents, pandemics and similar events beyond the Group’s control; the impact of competition in the banking and financial services industry; capital, liquidity, leverage and other regulatory rules and requirements applicable to past, current and future periods; UK, US, Eurozone and global macroeconomic and business conditions, including inflation; volatility in credit and capital markets; market related risks such as changes in interest rates and foreign exchange rates; reforms to benchmark interest rates and indices; higher or lower asset valuations; changes in credit ratings of any entity within the Group or any securities issued by it; changes in counterparty risk; changes in consumer behaviour; the direct and indirect consequences of the conflicts in Ukraine and the Middle East on European and global macroeconomic conditions, political stability and financial markets; political elections; developments in the UK’s relationship with the European Union (EU); the risk of cyberattacks, information or security breaches, technology failures or other operational disruptions and any subsequent impacts on the Group’s reputation, business or operations; the Group’s ability to access funding; and the success of acquisitions, disposals and other strategic transactions. A number of these factors are beyond the Group’s control. As a result, the Group’s actual financial position, results, financial and non-financial metrics or performance measures or its ability to meet commitments and targets may differ materially from the statements or guidance set forth in the Group’s forward- looking statements. In setting its targets and outlook for the period 2024-2026, Barclays has made certain assumptions about the macro-economic environment, including, without limitation, inflation, interest and unemployment rates, the different markets and competitive conditions in which Barclays operates, and its ability to grow certain businesses and achieve costs savings and other structural actions. Additional risks and factors which may impact the Group’s future financial condition and performance are identified in the description of material existing and emerging risks beginning on page 258 of this Annual Report. Our 2023 suite of Reports Barclays PLC Annual Report 2023 Barclays PLC Pillar 3 Report 2023 Barclays PLC Country Snapshot 2023 A detailed review of Barclays’ 2023 performance with disclosures that provide useful insight and go beyond reporting requirements. The 2022 report integrates our ESG (Environmental, Social and Governance), and DEI (Diversity, Equity and Inclusion) reporting, and incorporates our Task Force on Climate-related Financial Disclosures (TCFD) recommendations in this, the sixth year of disclosure. A summary of our risk profile, its interaction with the Group’s risk appetite, and risk management. Barclays PLC Fair Pay Report 2023 An overview of our global tax contribution as well as our approach to tax, including our UK tax strategy, together with our country-by-country data. An overview of our approach to pay, including the principles and policies of our Fair Pay agenda. © Barclays PLC 2024 Registered office: 1 Churchill Place, London E14 5HP Registered in England. Registered No: 48839 

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